Hello everyone and welcome to another episode of Selling Greenville your favorite real estate podcast here in Greenville South Carolina I'm your host as always Stan McCune Realtor right here in Greenville South Carolina and you can find all of my contact information in the show notes if you need to reach out to me for any of your real estate needs and please if you enjoy this content please subscribe to the show please like rate review anything like that to support the episode to support the show all of those good things I have a special guest again I just interviewed Chris White and but we have another special guest on the show this is Mario Brown the CEO of Affordable Upstate and Affordable Upstate has a mission that's near and dear to my heart which anyone that has listened to the show for some time already knows we talk a lot about housing affordability and the main mission of Affordable Upstate is to provide workforce housing in the Greenville area and so we want to you know I talk a lot about the affordability concern but there it's not often that we have a housing affordability expert on the show and so that's what Mario in his role can be so Mario thank you so much for coming on the show appreciate it Mr. Stan thanks for having me I'm excited to have a a real estate conversation around a place near and dear to my heart my hometown of Greenville and I think you know your experience not only as an agent but also as a property owner I think really will drive conversation for your audience relative to understanding what the landscape looks like and why affordability is a bigger problem than absolutely than we might think yeah absolutely and it's an it's strangely an under the radar problem you know everyone complains about the prices in Greenville nobody seems to want to do anything about it in my opinion and but besides non profits like your like Affordable Upstate and several others that are doing a good job but why don't just for the casual listener that has never heard of Affordable Upstate want you share with us a little bit about just put some meat on the bones of what I just said for what you guys do yeah how long you've been doing it and all that yeah yeah first and foremost we are for profit right so we're a mission driven for profit that goes out and we buy I love to say the thing properties with the right things wrong with them so 1970s to 1990s garden style apartments we go in through a targeted capital improvement program improve it layer an affordable housing incentive namely a tax abatement and then we manage it in a way that's both economically mobilizing but stabilizing but stabilizing for the resident with programs like Flex Pay the resident can programmatically split their payments in half to align their expenses and income better paycheck to paycheck right or a deposit alternative so they don't have to come up with first and last month's rent you know if our average rent which is right at $1,000 first and last month's rent two grand we also report all positive payments to the to the credit bureaus so 3% of landlords do that and we're proud to be one of those we started our firm about 10 years ago after graduating from Leadership Greenville which is a great program that our local chamber puts on I think this is their 50th year we were class of or 53rd year we were class of 43 and wow really what activated my the real estate professional in me was this thought that I could somehow align my professional skills with the community need to your point affordability I'm not sure how it's under the radar but it's been a very evident for a long time that there is a supply demand issue here and we're seeing it relative to home appreciation lease rates and the like yeah absolutely so I'm curious and I think I might have accidentally referred to you as a non profit earlier so I apologize for that but that actually is something that you hear people talk about a lot is that and this kind of ties into the affordability thing that sometimes there's this angst that it you can't bring down housing affordability with using let's just call it capitalistic free market principles obviously you guys are saying no we can do this and still make a profit why did you choose that model and how has that just worked for you guys in general yeah I I so I think the reason we chose it and we should really frame this entire conversation around public private partnership this isn't innovative to us we're not the first to do this this is a very common approach relative to parks and other municipal projects schools or you know green space so I so yes public private partnership so a for profit entity working with both the government and a non profit to achieve a public good I think that the reason we chose it was as we sat in Leadership Greenville and listen to all the issues and really assess the players right the non profits and the government um we'll call them bureaucrats that were are were articulating the problem it was easy to see that they needed a they needed a someone to initiate right to initiate and bring them deals right so on one side we were hearing that and the other side we were in the market so we know how hard it is to actually buy commercial real estate and the hard money that you have to put you put into it or the risk we've raised just over $50 million from 103 investors during our over the last 10 years wow and we knew all those were factors that the government and non profits weren't that format was a hard thing for them to do so we saw a great opportunity to bring those things together by doing that you know the investments get a better return because things like property taxes are abated but the most important part is the community gets housing at a subsidized rate that it wouldn't otherwise have by parlaying in that P3 structure so I think for us it was just a very evident that that you almost had to know the local government to actually do this so you know who's gonna do it but us I mean most of our apartments here in in the upstate and this is this is throughout the southeast are owned by New York and California private equity and that's not that's not anecdotal that's not conjecture if you look at a complexes that are traded above $10 million or above 100 units 90% are owned by investors out of state they don't know the local municipality and its and its goals that's right so it's incumbent upon us as residents and citizens of Greenville to bring our skills again and align them with the community need what so from your perspective having done this for 10 years which is coincidentally the same amount of time I've been a realtor so we both you know have some have some overlap here in terms of the dates what have you seen as some of the main drivers of the affordability issue in Greenville which you know obviously this conversation has become a lot more poignant since Covid that's kind of a nationwide thing it's not you know that's not specific to our area but beyond that beyond just the extreme cost of housing going up so much since Covid what else have you seen yeah I think the underlying drivers at least from my perspective are 2 and you're right they accelerated post Covid 1 1 is supply demand guys in your listeners this is a like a PSA here if you're on the list the if you're the number one place to move you're gonna have a problem there is a shadow to that yeah right nothing is all good and nothing's all bad there's contrast here so because of all of the folks moving in that drives demand for housing up right and the folks that are you know that are here and their incomes are based on jobs that are here they can't easily keep up or compete with a couple moving down from you know where well you know Suffolk County New Jersey let's name a place sure right so that's one issue so greater demand because of the immigration and Greenville's how attractive Greenville is to as a market and then I think you look at inflation relative to operating cost right so you know you're a landlord and an owner just like I am so when your cost go up what do we do as any producer we pass it on so that so between those two factors you know supply demand and inflation I think that you know we've seen you know I mean rents in that 10 year period I think I mean I I'd estimate probably 35 to 45% they're up it's crazy yeah and it's been you know it's been a wild thing for me to see as a realtor just you know you know it used to be that when I first got into the business I remember like having a client go under contract for $300,000 that sounded like a lot of money my first house was $80,000 you know back during the recession and things have changed now the now the median I actually just saw GGR just came out with the market stats which as I'm recording this that will be the episode that goes probably before this episode so listeners have already heard about this but 330,000 is the median price point that's the median the average is in the four hundreds if you wanna go with averages so that's just and you know it used to be in the one hundreds you know not that long ago which is just wild and this is a quantitative these are just the numbers what 330,000 gets you and where in town it gets you that's right that's that like to be boots on the ground you kind of even get more perspective that and I tell people that you know we've kind of focused as a community on these historic neighborhoods like Spartanburg Green Line or Nicholtown and there have been concerted efforts and conversations around gentrification zooming out I think everybody's been gentrified I think what it cost to be in Nicholtown what it cost to be in Gower what it cost to be in Parkins Mill what it cost to be in Malden everybody's been pushed further south relative to their incomes in relative to the to the purchase price of a house they wanted to be in and the bone that yeah and that that's actually a great point that you know we tend to confine a a certain part of the population a certain area to gentrification but we are seeing we probably do need to start rethinking through what that looks like when you have this level of appreciation that happens in in such a short period of time you know what something I've said on the show many many times over the years is that I don't feel like Greenville County specifically is taking the affordability issues seriously in fact we're recording this on July 15th the post and Courier just came out with a with an article about the Greenville County is expected to lose a pretty substantial lawsuit to a developer because they stonewalled a development that they had had approved after they got complaints about it and now taxpayers are most likely gonna have to foot the Bill for a huge lawsuit and probably the development is still going to happen but the point is that they stonewalled it and slowed down the development for several years and we all want to preserve the character of Greenville like that's the big talking point and that's where County Council and I understand their struggle they're getting they're hearing from the community Greenville's character is not being preserved because of all these apartments because of all these different neighborhoods that are coming into play but then we also have to grapple with the growth so what are what are your opinions on that how having been in your position having liaise the government and all of that where is that how do you strike that balance man you're I mean you're highlighting a great point and I think it you have to understand like how difficult this conversation is you know what are we expecting from our elected official that who what are we expecting him to understand both you know capitalism and the capital markets debt and equity along with supply and demand along with construction along with development a lot what I like I think it's a lot it's a lot for even us to wrap our heads around yeah so I think I think in some ways we have to figure out how to reflect where we are today I don't I think we got to let go of preserving character right I mean I really you know what is it to preserve character but like people are you know dying in the street or living in the street sure oh but you've got your character what if my character what if I think our character should really be more embodied around how we take care of our citizens how we take care of our community people first right like it doesn't matter if that's a neoclassical architecture or it's a little modern for your taste but anytime we limit supply we exacerbate the problem so the county stands in they actually stay they're actually creating the worst problem right like it's actually they're not just you know in in in different in certain ways or but if we restrict supply even at the even at the high end we yeah we ensure that prices will continue to go up so I'm sorry I have yeah I just I was love to say with relative to like apartment complexes Today's Class a apartment is tomorrow's naturally occurring affordable housing right so there we need to add supply at every level and we're and I think the difficult thing to accept is that we're not gonna see it we're not gonna see relief anytime soon yeah it takes so long right you understand we have clients that are building houses and you know that's a single family home and you see how much planning how much time how much friction there is to bring one unit of supply to market alright so it's a it's a lot are you it's a lot so like when you scale that out and you complicate it with you know government I the government in any way I think it just complicates all of it and I think that particularly when you have elected officials who are very much tied to being reelected and their constituents which that's that is that they should be yeah it's a difficult thing to grapple with but we're the Nimbys are not my backyard it's almost like I've talked about them a lot on the show that my audience is familiar with that term yeah so it's so as long as that exists and that reflects us you know like yeah I think it's always it's gonna be a tough road to hoe yeah elected leaders are gonna keep reflecting that energy as long as the constituents keep doing that so what you know you told me pre show you're not just in Greenville but before we recorded this so how does in terms of the how the government responds to these sorts of talking points like let's not worry about character let's worry about the people how does Greenville compare to other counties with regard to receptiveness to that is Greenville on the more completely un receptive or more receptive towards that compared to some of these others that you're in yeah so we actually spend a lot of time with this in terms of rating markets for and when we say markets we mean counties and cities and on their P3 activity are they are they is are their rules and statutes conducive to collaborating as a for profit or are they restrictive I think when you look at the city of Greenville I think I don't know of another city at least in the Carolinas that's putting more energy behind affordable housing what Shannon and team are doing there is it it's awesome they're land banking they're like they're locking they're locking in sites for future affordability I think the county is having conversations there are things on the books but I but there's a disconnect for us we prefer working at the state level a state level statute and so our the abatement that we utilize is a state statute by right so that we can be sure that we can go out and borrow $20 million and raise a bunch of money to buy a project and know that we're stabilizing that for the community versus the legislative risks that exist at the county and the city level I think there are also tools that the county and the city don't really have visibility to are there their issues they don't have visibility to and that's based on their size and I think that kind of blinds them to some of the yeah some of the easier text amendments that could allow for greater let's call it impact capital to go to work in this in their in their market so I'd rate Greenville County a little lower than the city in terms of it's focused on affordability and P3 but it it's a lot better than other places though man it's not it's not it's yeah it's a lot better than other place it could be worse that's good I mean we need to be better but it's good that it's not the worst well I think it could be both I think it can be not good enough but also the friction of hey at least we're not at least we're not you know blind and dumb like that county right you know like so I think there that we're gonna wrestle with that friction and I think that's healthy and I think we need to have elected officials and government you know employees that understand there's gonna be friction just like build that house there's gonna a selection's gonna get off it's a messy deal right but we need to measure it on human impact how much of what you guys are doing and perhaps people that you partner with is working in the world of trying to build new inventory to satisfy these supply issues versus taking you know old inventory whatever abandoned property and rehabbing that so we've got a documentary actually we shot over the last year on a 38 unit complex in Barea that we preserved and it's gonna come out soon OK I was gonna ask where is that gonna be coming out so we're working through distribution right now right it's not our it's not our forte but we wanted to produce at least a 30 to 40 minute hey here's what preservation is and in that Mayor White talks speaks to the importance of preserving what you have first because it's so expensive to build that that new complex new house so we've been focused on preservation I think some of our partners do new development it's a different game it's more difficult I'd say our space is preservation however you know we have we are in talks about kind of developing a missing middle product some lower scale that we could fit the rhythm of our residential neighborhoods we really like that concept but our 100% of our business today is in the preservation space I think the missing middle piece could become more and more important just to satisfy the Nimbys and for those that you know don't know what we mean by that or at least I'll give my definition you can correct it if you have a different way of looking at it but that missing middle housing tends to be higher density housing that's disguised to fit within a lower density type of area so you know duplexes quadruplexes that fit in a neighborhood without looking like a duplex or a quadruplex without looking you know you usually when you walk around Greenville you can see okay that duplex you know it looks like a an awful looking brick ranch or an old mill house that was converted you know and it doesn't it just doesn't look nice within the community some of this missing middle housing is supposed to is supposed to blend in and not be that sore thumb and did I explain that well for the audience in your opinion yeah what would you add yeah no I what I'd what I'd add is it's yeah it's the bringing density to single family sites or residential lots that yeah it fits the rhythm of the street as developers would say right so that we yeah and I think that it's not often focused on because the better you get at the game the larger the scale right like you need because it's just as much time to develop a triplex with permitting and timing as it is 100 units right so most developers actually grow in scale in in sales volume right they don't they don't tend to stay in that a missing middle sure zone but when you as but as you look at you know Sunbelt markets like the city of Charlotte I think we can really learn something that they you know now that pricing is so expensive now it makes sense to do a duplex or what a what developers call a duet there's actually a very interesting one right across the street today from the Rock Quarry Park the Rock Quarry Park right there off of downtown a developer put yeah 2 luxury it's a luxury duplex right for sale so that's him bringing higher density to a single family site obviously that's not affordable but it's more affordable for those two couples that'll buy those than them buying one lot and building one house so that's so same principle scale down to afford like you know to the affordable realms of you know 70 to 100% am I and you and you alluded to this earlier but I did want to mention that there's been multiple studies but there's one really good one that came out of a I think it was about a year and a half ago maybe two years ago that basically showed that even luxury housing supply coming on the market affects affordability downstream because you get you get the domino effect of well the step up buyer that purchases that luxury house releases their inventory which becomes a step up purchase for someone downstream and then eventually you know all those step UPS happen and releases you know in theory affordable housing at the very end of that mm hmm yeah let's think about it like this let's use a you know neighborhoods that you operate in every day a new house is built in Parkins Mill a young couple from Gower they love it they move into it right so what do they what happens to their house well either one of the probably someone in Gower buys it but that creates that creates a lower price opportunity for someone in Gower and let's just say that well economic mobility is a real thing and someone living in Nicholtown says hey we're having kids we'd love to be in Gower so they move to Gower right and so what happens their house in Nicholtown right now we have a 300,000 400,000 dollar listing in Nicholtown because of the house built in Parkinson's Mill right so that's a that's an application of that that spectrum yep yeah absolutely and I have seen that dynamic happen personally you know I've been in the rental space myself since I believe 2013 and I started off we you know we talked about this a little bit before recording as well I started off in the Section 8 world I still have section 8 rentals I have I've sold off most of my properties that qualified that that worked in the Section 8 space but you know it's very a lot of things are very eye opening once you once you enter that space and one thing in particular to kind of go back to the to the rehabbing model versus the building model is that sometimes you go into a property that and I know this because I've done it that you know the property has been basically un it should not have had people living in it but people were living in it okay that's right so you buy it you your goal is to fix it up and then you run into all these county or city level you know restrictions when it comes to just the code and just everything that needs to happen in order for them to give you CEO I had one property where you know they were super focused on the landscaping the city of Greenville was and I understand but that when I bought the property which had renters in it living in unlivable conditions very very it was very sad there were drugs coming in and out flowing in and out all sorts of things there was no focus on the landscaping but I got I got penalized for going in there and trying to bring this up to a livable property now I have to also focus on all these other things I get it I fully fully understand that this that's those rules are in there for a reason but you know I'm curious if you guys have run into that sort of thing and what you do about that I mean I know you've run into it on some level no I'm just I'm just laughing because it's I think in some ways yeah the it's ness it's necessary but I think it's it'll be helpful for us to like articulate you know what that does to the net rent price that you can charge that's right so if we buy a house for $100,000 you know the rent would be relative to that hundred thousand dollars right if we go in to renovate it because it's deplorable it's not livable alright we put 100 and we put another 20,000 in so now we're at 120,000 alright and now through you know code or we have to put another 5,000 in because of landscaping and time so what would have been let's call use the one percent rule a thousand dollar rent is now 1250 so rents up you know 25% because of the cost to capitalize the full project I mean I tell you I I've been on all sides of it and I really I actually appreciate the city of Greenville I think they've actually with their unified code and even some of the like the what they're doing with the tree ordinance put money back into affordable housing but I think anytime a government and it anytime a government grows in reach there's gonna be more to deal with right and so my net evaluation is are they still focused on the right things with that extended reach are they still you know creating product or programming that the private sector could not do right that's what we need our municipality doing and I think we gotta evaluate them on the net but yes it is cumbersome as hell haha to deal with yeah and yeah there's obviously got to be a balance to all of that that you know I wish we had a way for we don't currently have this mechanism at least not for the mom and pop landlord perhaps others do but not a mechanism for giving perhaps additional leniency for someone that's taken unlivable property and making it livable which I don't necessarily have a that's more of a problem without a solution I think no I think that's a great point I think you I mean everyone's up in arms and obviously with the recent changes in legislation around corporate ownership of a single family homes and how that's actually driven up single family home values right so these are now rental housing rental houses that this big corporation owns but what so what can the city do to promote local ownership because it's a local landlord that actually accepts a Section 8 voucher that's right the Corp the corporate one does not so it so there are there is a conversation to be had there how to how do we promote local ownership and I think to the to the beginning of this conversation that's what we actually saw in in the apartment space hey if there's not local ownership there's no connective tissue to the non profits and the you know the public good needed in the community if it's all done from New York how's that non profit gonna approach get convince how's the Housing Authority gonna convince New York private equity to accept the voucher they're not right yeah right it's a heartless it's a heart it's not I won't say it's a heartless business but it's a it's a the capital business so I think promoting local ownership and then engaging it through the Housing Authority and I think I'd love to hear a question for you in terms of your experience there I know that's been a over the years a another time cost is managing the housing authorities vouchers within our units but as a landlord to landlord what do you what's been your net experience kind of over that period yeah that's a great question so I want to first off shout out to my property manager Kimberly with expert property management she I could not have ever entered the Section 8 space without her so I know that she and her mother listens to the show so I'm gonna give her a shout out and well deserved yes expert property management that's a that's a free endorsement but she has handled the in terms of the when I have a property you know we get those inspections that come through and it needs this or that she has handled that exclusively for me and here's what's frustrating and maybe it's gotten better I don't know but you know and this also happens when you're doing a rehab too you have someone that goes out there I like to call them clipboard warriors they go out there and tell you here's all the things you need to do you do them all and then the next Clipboard Warrior comes out and they find more things that the first person didn't and then you kind of keep going through that cycle until eventually you know now you've had a vacancy for several weeks longer than you anticipated and the your expenses are increasing because you're having to do all these little things that probably aren't actually impacting the future tenant in any meaningful way in some cases we've got the tenant signed on already trying to get them off the street and but we can't because we're trying to you know there's a few you know outlet plates that are cracked or whatever you know something that genuinely doesn't prevent a person from moving in and that you and I have bought probably bought and sold homes that had these issues without anyone caring but the housing authority cares and while I do respect obviously what they're doing they're trying to protect these people from predatory landlords and landladies that has been the biggest complaint that I've had and the biggest complaint that I've heard from people in the program is dealing with those you know those inspectors that being said having someone like Kimberly that actually knows how to navigate all of that really really makes a huge difference and takes a lot of it it's made it to where it's still not been such a burden for me that I'm like I've I'm opting out of this program I have heard other others say that it's such a burden that they want to opt out and they have for me it's not it's not been that way I think the biggest challenge so the biggest benefit of that program is the ease of payment that direct deposit you know just goes into your account it's fantastic my biggest complaints have been a turnover is difficult in the Section 8 space you know if you get people moving out after a year you're really not gonna make money if that's happening year after year and that can be a challenge and then the other one has been that sometimes someone comes on with a full voucher so their the entirety of their rent is covered by the housing authority and then they get a new job and now they're expected to pay part of their rent because their income went up and some I've found that some of these tenants are not prepared for that they're not prepared oh now I have to I before you know I was and you can't if I remember correctly I don't think that you can adjust your lease at that point the lease is set in stone you've already that's already been agreed to by the Housing Authority and so they have agreed to a you know 12 dollar lease the housing authority was paying for that now they have to pay $400 a month because they got a new job and I've had situations where now a tenant can't afford because they got a better job they can't afford where they're they can't afford their lease and I you know I wish that that was a better system I know I'm right there with you I think you hit on a major point I think a lot of the inspections you know in a lot of the diligence and the B backs the clipboard warriors as you say it is to protect the resident from slumlords let's call it that absolutely or actually but you said the local or landlords predatory landlords yeah that's right that's right which I think that you know the housing authority has been so concerned about that that there are no more landlords and landladies now it's just corporations yeah because cause you've been so difficult to work with and corporations don't want it because the demand in the market is high enough the cost of like the ease of payment that's the biggest benefit you named and it is but it isn't now like now I got you know what now I gotta work with you on you know managing their the residents income and I gotta take 400 in my Ledger that I got 800 from you like how do they make I think it's that's public private partnership how can they make it easier for the for profit the local for profit person who has a house or two that they want to what would make them say yes what would make them say yes and if it's gonna be more work more time and more frustration that you know I think this is a you know an investment principle that I don't know that the you know housing authorities overall have a few you know a good track on but it's the time the time value of yeah so time cost right so you know we're buying revenue streams with these houses if you're telling me that my revenue stream is gonna be more erratic that I'm gonna have 30% more time in what would make me say yes outside of my outside of my concern for my community which you know and my responsibility what would make a someone who wasn't in the know who couldn't hire a professional manager like you have you're a professional hiring a professional and it works yeah but what if what if you weren't and you wanted to do it yourself it's hard it's hard to do it's super hard yeah super hard yeah and the barrier to entry is obviously a big problem I mean I have people come to me all the time just like hey how do I get into the Section 8 space and I'm just like I'm you gotta talk to my property manager cause I am not the person I acquire the properties and that's it and I think that that's the that's the best bet for people so what in terms of the in terms of the private public or public private type of partnerships that are that are out there where what more could be done with regard to that I'm curious in our area I think from the from a for profit owner side I think it it's really looking for opportunities to create the what I think we all thought Section 8 could be and I think that's through partly with non profits right I think there are several local non profits that have programs that where they want to come in into a mass release and bring case management that are way easier to work with they actually filter the like the bureaucratic noise in that government dollar so think about it like this the Housing Authority brings federal dollars through a housing Choice voucher to a landlord right that's it those are federal dollars so that's where all those commercial rules are non profits do the same but they actually let's they yeah they filter the noise right they handle the bureaucratic reporting side and it's more of a partnership and so I think they're you know we have some 20 or so non profits that reside in our apartment complexes in different formats some master lease a few units some master lease 10 units but it I think that as a for profit is really going to the non profit community and really understand understanding how you can fill a need for them and that need is they need housing units they're not great at buying a house like you are they're not great at ID and the capets and having the contractors management all those all that infrastructure you've built out or others have yeah I think that it's looking to those in the community that have the dollars by way of grants but don't have the physical units those are the those are the great partners in public private partnership in my mind right now sure so we'll probably I'll give you an opportunity to say you know to add something here at the end but probably my final question for you unless I have a follow up so we've talked a lot about the issues right and obviously you know I'm I if I'm listening to this show I'm thinking okay Mario and affordable upstate they're doing all these great things I have some rental properties and this whole Section 8 thing is not for me whatever what do I do what is what is the mom and pop landlord landlady that's listening to this is not predatory that that does want to do something or maybe even they're not a landlord or a landlady maybe they see this issue they want to do something what can people do that don't have a non profit or a for profit entity specifically oriented around this topic yeah yeah so that's a that's a great question and I think that outside of really going to where the conversation is I think Greenville this is particularly city of Greenville but several non profits are great conveners of conversations right so one get in the mix and none of this is gonna be free right so meaning either you pay in time or you pay in money right so I think but I do think that it's 100% worth the time to get educated on the non profit mandates their missions and how a for profit small landlord could partner with them I think that I tell folks this every day everything I Learned about affordable housing from Ames to all the superfluous acronyms there's so many acronyms um it's a great it's a great mode around your real estate activity every year that knowledge becomes worth more money because I am sold on the supply and demand issue affordability is not going anywhere it's only gonna get worse so by parlaying that with non profits or the housing authority in certain formats and it's my opinion that is a way to offset some of the inflation folks are realizing you're right it's a so I think that's I think that's one in terms of the non profit community but I also think that there is a you hit this I think professional management is yeah I think it's too hard to do it anymore it's too hard to kind of to bootstrap you gotta bake that management cost if it's 8 10% into your performance because otherwise you know there's too many things to get to know and there's too many tripping hazards it's almost I almost look at it like hey that's the way I can cap my cost yeah I can I can yeah but you know it's a little higher maybe I'm used to 35% operating expense ratio that's gonna be 40% but it's a fixed 40 versus a variable 35 right and again we're looking for stability of revenue right or a cash flow and I think it was beautiful the way you know I look at my manager or talk about them know a property management with the same and during the look I saw in your eye haha is that yeah they are the they are the operational convener they understand the landscape and without them you know it'd be me fumbling around meetings really not ever really getting residents placed housing provided and you know and operations you know stabilized is there anything that you know let's say that there's someone listing they've got like a duplex or a triplex or something like that they don't wanna they don't they don't wanna do Section 8 they're just looking for maximum profit but they do have a heart towards this affordability issue what can they do is there anything that they can do within the framework of that property yeah I would what to maintain profit the you know to keep to keep things at numbers at pencil but to still make a little bit of a dent in this iceberg of an issue yeah I mean I think that I mean if we gotta look at 80% Ami real quick you know 80% Ami for a three bedroom house is probably close to 15 dollars you know so we're not talking about we're not talking about 500 dollar a 500 dollar rent of a house we're talking about an actual a really healthy lease rate so I think it's understanding where their market rent for their property is relative to the Ames in the area hey if I'm charging 16 hundred dollars alright who does that actually reflect what job what Ami does that reflect and then that tells me hey oh wow I'm actually providing affordable housing here at 80% Ami man maybe there are some incentives or maybe there is a non profit I can partner with and now hey I can speak their language I'm 80% Ami do you want to do a master lease but I think you know I and I call a few managers you know by name you know the you know Clark Meyer over at Filmon or Brian over at Progressive Properties like those guys are great hybrid guys that actually balance the that price point right that it it's workforce affordable right it's not capital a affordable so there is a I think that's another that's right it's not it's education is probably the biggest barrier for that duplex owner and I unfortunately you know just like you gotta be more savvy to buy today you know the way you finance it the way you do you gotta be more it's a little more nuanced to own things today and the education is often the gap hmm are there any resources oh sorry go ahead I'm sorry yeah so you can hire that you can sub that out by hiring a professional or you can go do it or you can go learn it yourself through listening to guys like yourself or learning like I did a bunch of years ago bigger pockets yeah absolutely yeah bigger box is a great resource for a lot of people you know it's kind of like the Reddit of the real estate world in a that's right that's right that's right so are there any resources that are out there for you know let's the this you know person that is has a little bit has a small little rental portfolio they wanna still they have to still make money with that but they wanna help with the housing affordability thing where would you direct them and I honestly outside of using telling them to go use Claude or Chat GBT I would just have them near their search of the non profit community there's so many I'm not going to list because I don't have favorites but I think that there is a wealth of knowledge these non profits you know they receive grants they are quick to articulate their impact and what they need they do a they hire these folks that do these studies that's it's a wealth of knowledge just changing your lens in in terms of yeah of where you're going to get the information but I think online there's a wealth of information there just carry the lens of a not like a local non profits and affordable housing as a as a keyword and there's literally it's limitless absolutely those are all the questions I have I think it's been a great show is there anything that we didn't talk about that you wanted to make sure that we brought up I think at the no I think I would just kind of cap the conversation with you know our thesis over time has become how do we replace private risk with public participation how do we go in and as a market rate actor do all the activities like you said buy that crappy house deal with that bad situation stabilize the physical asset and then how do we then replace our risk with participation by way of a housing choice voucher a non profit partnership a tax abatement or even selling units or homes to non profits homes of hope is another great institution in our market so the so I think it's actually seeing yourself as a a provider of housing for the for the community and you because most of the homes you look at aren't owned by you know or excuse me they're commercial real estate at least and they're not owned by folks that are within 100 miles a year so your perspective boots on the ground is super important for your listeners right like if your boots on the ground you're seeing you're seeing it go down you're seeing what inflation and what growth looks like and I think the wisdom and the wisdom on the podcast would suggest look at the shadow look at your neighbor who's not doing well now and how can you do something about it sure and I would just say challenge all the realtors listening to this which I we have a decent number of realtors that that tune into the show the Great Agreement Association of Realtors is constantly working with organizations like homes for homes of hope habitat for humanity rebuild upstate all that are kind of adjacent to this this conversation I had the opportunity to attend the homes of Hope Gala that they had and were you at that by any chance not the not the most recent one OK I was on their board for about five years and sure Don Oglesby's done I mean he is he's the he's the goat it's fantastic yeah it's incredible what they're doing and it was funny I had either a first or second degree connection they showcase two different people that had gone through the program I had either a first or second degree connection to each one of those people which just shows you these people are just in our community like you don't even necessarily know you might know someone that's being helped by an organization like homes of hope or habitat or whatever and you're not even aware of that because you're just you're walking past them in the grocery store you might be going to church with them you might be you know in in a park with them who knows but these are just normal people I think they can be stigmatized sometimes that for whatever reason but a lot of these people are just normal people in the community that for whatever reason you know they just need help because the market has outpaced their income man Stan I should have started with this and I this will be my kind of last bus statement but I love to tell people that I live in affordable housing and they live in affordable housing they're like what they're like what no what well what's what is the definition of affordable housing it's 30% of your income what and for your agents listening debt to income what is that yeah so 27% of my income no more than that can will the bank underwrite me to buy a house so all it's the we all live under the same like guidance right like I live in like housing affordable to me based on my income right absolutely and so and so to all of and so does the whole community and I think you know what who were the folks were talking about the workforce teachers cops baristas those folks that yeah like how does that income per at 30% what does that get someone today and I think it blows your mind when you look at it like that and as we grow we need more cops and more teachers and more firefighters absolutely and all that absolutely and so we can't we can't just turn off our blinders to all of those people at the end of the day that's right that's right well Mario thank you so much for this discussion really really enjoyed everything you had to say I'll put your contact information in the show notes I'll get that from your from your assistant but if the people want to find you or your organization where should they go yeah so if you want to reach out find me on LinkedIn that's probably the most public place I am but if you have someone that is looking for affordable housing Noah PM dot com so Noah is our property management company I'm gonna do a great job of marketing the 3,000 apartments they manage here in the upstate you know accessibility is another issue that we need to get into today is like how does someone find it when it's there right so yeah but Noah PM dot com is a great place to send someone in your community or in your life that that needs you know an average rent of 1 thousand bucks and something in and around town absolutely well that was Mario Brown of Affordable UPSATE everyone thank you so much for watching and listening please like great review subscribe please check out the contact information for and in the show notes for my contact for Mario's contact information and I'll talk to you guys again next time!