Codina Partners Part 10 - How To Make It In Commercial Real Estate? Just Ask Armando Codina

KW: Yes, very well.

AC:So my advice would be they are no shortcuts. You have to pay your dues, and you got to learn along the way. You can begin with a big project. Miami's plastered with new developers who flew in, parachuted in, the last part of the last debacle -banks gave money to the wrong people and combined with the appraisers they don't get enough of the blame that used to give you an appraisal. Take your time and learn the ropes. Learn the fundamentals, and the only way you do that is if you worked in leasing or management or construction. I'm glad that Ana dad, and she can give you her own point of view grew up and she worked for a couple of other people before she came to work for us as a developer and in leasing.

AB:So I would say pretty much the same thing, but in a different way. When I was in business school I had a lot of fellow classmates who would ask me if I want to get into real estate. What do I need to do? I just got this MBA I'm very fortunate that I had the opportunity to come work with my father, but I would say --no one ever likes this answer but very similar to what he said, I said you know one of the things about real estate is experience is a lot more valuable than a MBA. There are a lot of people in real estate who don't have an MBA so it's not going get you in the door like it does the investment banks or the accounting firms. Go be a broker for a few years, learn the business, and really understand it you know. I really think the advice is, don't feel that you're too good for any job. Real estate development is a very complex. You’re really like an orchestra conductor so you really have to understand, you don't have to really understand nuts and bolts of construction, but you have to understand enough to not get taken advantage of. You need to understand the sales side, the marketing, the leasing side, and then you need to understand how to manage assets. So really being in the weeds for a little while is a huge benefit, and the only way you're going get the attention of a real estate developer is from experience.

AC:I don’t have an MBA. I think an MBA would have impaired me because the MBA sometimes have a very narrow.

KW:It helps you on the finance side, but not the nuts and bolts.

AC:I remember when we were getting ready to buy a lot. Of you asked the question going back into the market when I said we're going to go and buy, here that's what I want to do. We had these two MBAs. Everything that they presented was you know, longer and ugly. They ended up calling me Dr. No, Ana said. So one day I sat them down and I said listen guys, I don't understand all of these spreadsheets and all the prep, I forget all of that. I want to buy buildings. I have fifty cents on the dollar replacement value and I know what replacement value is for these. So if we can get him a fifty cents again, I understand that. I don't understand all of these MBAs. As I told you before we were not able to buy any of those in Miami, which we did buy in Dallas at thirty-three cents on the dollar because I wanted a little extra buffer if I was going to do it remote, so common sense, also, I think it's a big component.

AB:I think one of the biggest components of staying out of trouble in real estate is knowing what you don't know. I think we've been very good about that. Condo development I went to my father said listen we got into a lot of trouble in condo development, we need to add someone to the team who really understands that business.

AC: And we got the best. Thanks to Ana, we got a guy who had worked for Related for 18 years. When we were doing industrial we didn't only know more about the market, but also the rise up, the tilt up guys and all of the guys that wanted to work for us, but we had access to the tenants and we had tenants who wanted to stay with us. When I had to do home building, because we bought all of these distressed stuff, we went to Jim Carr and said hey. And that's a tough business and their home building business, and in my opinion like a peer he is the best. We went out and got the best and said hey let's do this.

AB: It's ok to get a consultant or an advisor and ask for help.

AC: The last component is the debt component. We have been very careful about that so in real estate, that is your best friend or your worst enemy; and there's no in-between.