Real Estate Underground

Peter Neill's Blueprint for Affordable and Workforce Housing Success

• Ed Mathews • Season 4 • Episode 142

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Ed Mathews:

Greetings and salutations Real Estate Undergrounders. It is Ed Mathews with the Real Estate Underground. Thank you so much for joining us today. As always, if you get something out of this episode, I would very much appreciate you hit that subscribe button or that follow button, because it certainly helps us grow. And to the many, many, many people who are listening right now, thank you, and we certainly appreciate you. So with that, I am joined today by Peter Neill with GSPREI. He is in a business that is near and dear to my heart and he actually is from the Philadelphia area and is somebody that is occupying my old stomping grounds down in the Philly area. So, Peter, welcome to the show and it's good to see you, my friend.

Peter Neill:

Ed, it's great to be here. I'm excited to chat with you and talk about real estate and all kinds of things.

Ed Mathews:

Yeah, so let's get into it. So, for those folks listening out there who may not have come across you or your business, why don't you tell us who you are and what you do for a living?

Peter Neill:

Sure, so, like you said, my name is Peter Neill. I am one of the co-founders and partners at GSP REI and we're a vertically integrated real estate investment company primarily on on redevelopment and new development and, primarily in the workforce, affordable housing space. So typically the properties we focus on are in urban metropolitan areas and the surrounding suburbs and a lot of what we do is buying fully distressed sometimes you hear the word blighted. You know the type of properties dilapidated homes, that kind of thing so something we can pick up at a very significant discount to market. We go in through with our construction crews, fix the property up and then typically we'll lease it out and put long-term financing in place, so kind of like a burst strategy, or we'll sell properties as well. You know what I mean. So kind of a combination of the two.

Ed Mathews:

So being a, so in, in layman's terms, what Peter just described as rehabbing or flipping, which is something that I, you know, I tell people. I don't drink, I don't do drugs, but flip, so flipping is my vice right, and so it's something that just gets me out of bed on Monday mornings, and for a lot of different reasons. First, it's fun, but secondly, you are really contributing to a community in that you're buying houses that are banged up and converting them, rehabbing them, really nice, clean, safe places for people to raise their families. You know, the community is certainly improved because the neighbors, the neighbors, must love you, right? Sure?

Peter Neill:

Sometimes right, At least.

Ed Mathews:

Depends. But yeah, a lot city loves you because or the town loves you because now they're putting something that was on their tax balance sheet, on their master list or grand list, to something that they can actually charge market rate, you know, in terms of their own tax income. So the cities, you know, most of the time the cities are willing to play along if you've got a good reputation. So congratulations on an amazing business that you're building.

Peter Neill:

Yeah, it is, it is a good reputation. So congratulations on an amazing business that you're building. Yeah it is, it is a good thing. You know they certainly haven't eliminated all the red tape, but you know they are. Especially, we do a lot in Baltimore and Philadelphia and the politics isn't. You know it's there, but everybody agrees on both sides of the aisle and the people in charge that there's an affordability crisis. You know there's people that need an affordable, clean, safe, quality place to live. So if you're producing that, if you're bringing that to the market, they tend to want to get behind that and help. You know as much as they can that kind of thing.

Ed Mathews:

Sure, why wouldn't they right? I've been. A few weeks ago I interviewed a gentleman who actually lives in your backyard, Marcus Thomas, and so he is a developer. He does a lot of Opportunity Zone in Philly.

Peter Neill:

Okay, and the same thing.

Ed Mathews:

Yeah, offline I'll get you guys connected because you two should know each other, and so the you know. It's interesting that you know here in Connecticut, where I'm based, there are anywhere from well, 30 plus thousand units behind where the state of Connecticut needs to be in terms of affordable housing. And you know, I and we're a small state, right, I mean I think nationwide it's. Depending on which economist you talk to, it's somewhere between three and a half and five million housing units.

Peter Neill:

Yeah, you know it, as high as seven. I think it was a Freddie or Franny. One of them just came out with numbers. I think they said the shortage was around a little over three and a half million or so. But yeah, I've seen the numbers as high as seven million, especially on the on the real. You know the low to moderate income. You know more on the low. You know end of the spectrum income type housings. You know, yeah, you keep it. It seems like that number is getting larger. You know it's. It's not getting. We're not cutting it. Unfortunately it's getting larger in a lot of ways.

Ed Mathews:

I mean the fact is, I mean you got you know families like mine, for instance, who you know we're, we're in our 50sies and you know our kids are now in college or graduating from college or just have graduated and they need housing, right, and they're broke, yes, right, yeah.

Ed Mathews:

And so you know my oldest is going to move back for a little while, but you know I fully expect her and we've had this talk that you know within a defined period of time she's going to save up her money and go buy something.

Ed Mathews:

Here's the challenge here in New England is that you know, just Middlesex County where I live, right, average house here is starter home is $380,000, $390,000. Right, so in order to afford that, you need to make 125 to 130,. You know, either as a couple or as an individual, and there aren't a lot of people who are making that because the average income is $76,000. So unless you are, you know, in a partnership or you know some sort of marriage or whatever, you're living with a boyfriend, girlfriend, whatever it's really hard to afford housing here. And on top of that you've got the challenge of folks because property taxes are wild here in the Northeast, that you've got elderly folks who are being aged out because their tax bills are growing to be larger than their original mortgage. In fact, they already have are growing to be larger than their original mortgage.

Peter Neill:

In fact they already have. Yeah, no, I just got the Freddie Mac study. This morning came in my email from a resi club, which if you're a data person you should definitely follow resi club, especially on the residential side. It's amazing. But it was a Freddie Mac study. It looked like it was like three and a half million housing shortage they estimate. And there was another interesting part of it was they were estimating that was like a million new housing formations that didn't happen because of the lack of affordability and the lack of housing supply. So that's unbelievable.

Peter Neill:

I mean, that's a lot of people who are staying at home, you know, and you know continuing to live with the parents and that kind of thing and saying you know they haven't started a family, they haven't moved out, you know, because of affordability. So it's it's the housing affects so many other aspects of your life. You know with with work, your personal life, your family, you know where you go to school, you know the opportunities that you have access to health care and things like that. You know it's it's not just where you live. You know there's all these. It has tentacles that reach into a lot of different aspects of your life.

Ed Mathews:

Yeah, I mean, and it's down to the core you know self-worth, right, why can't I afford a house? What's wrong with me? Well, there's nothing wrong with me. The system's broken right. And here's the thing. I saw four or five different surveys that came out over the last like 30 to 45 days that are saying that the housing market is going to continue to grow.

Peter Neill:

Yeah, no, definitely. I mean that was. That's another study that I just saw. I don't know if it was last week or so. I think it was out of the same Resi Club. I follow that. You know.

Peter Neill:

Anytime I get an email from them I stop and read it the right, all right, I flag it and go back to it, the I think it was like 16 of like your major. You know Goldman Sachs and you know different. You know companies that put out these. You know forecasts and things like that and I think it was like 15 out of 16 of them have the residential market increasing over the next. You know, continue on, I don't know if it was five years or whatever it was, or over the next year. So you know a lot of it just comes down to supply and demand at the end of the day. You know it's just. There's been a lot of you know interest rates and land costs and construction costs and things like that have affected the amount of new units coming online, especially in the single family space. Even on the multifamily side there was a massive boom, but I think it was over the last year or so. You know new starts were down. You know new permanent properties were down, all that kind of thing.

Peter Neill:

So, it's yeah, that's all affecting new supply coming online. And you know, I think the only thing that's really going to solve that issue of housing prices and rents and things like that continuing to rise is more supply. Rise is more supply. You know, and this was something that came up in the election and you know with with Harris and Trump, you know talking about, you know different ideas. So it's on a national. You know it's. It's people are talking about it all over the country on all, on all different levels. I hear it when I go to local. You know planning meetings and events and things like that. So it's on a local level, state level, federal level. You know trying to find ways to solve this problem and I think you know it really comes down to supply. At the end of the day, we need to find ways to bring more supply to the market and we look at it from two different ways. You know you have to redevelop existing housing stock. A lot of times that can happen a lot quicker because there's a lot of red tape involved in the development side. You know, especially if properties aren't zoned correctly and all, and they need zoning relief. And you know there's the whole not in my backyard movement and things like that, and it comes to yeah, it's just things that put pressure on creating more affordable housing, creating just more housing in general. You know you don't typically you don't see, like you know small multifamilies, you know duplexes, triplexes, things like that being developed and stuff like that. So it's it's, it's a crisis but and I think it's good that people are talking about it, you know, because eventually you think, if there's and people have been talking about it for a long time, but it seems like it's more and more and more in the headlines, so we'll see what comes of it I think there's a lot of opportunity in the space. As an investor, I think you can, like you said before, you could do something impactful for the community.

Peter Neill:

It's very satisfying and fulfilling to see a property go from, you know, dilapidated, falling down. You know just kind of a drag on the community, on the property values of nearby homes and things like that, because we deal a lot with on streets where there's people living there. I mean they're raising their family there. I mean they got a nice house, you know they're. You know this time of year, you know there's Christmas decorations outside. You know they decorate for Halloween and fall and things like that. So and then there's, you know, right, a couple of stores down there's a vacant home and I mean. So, like you said, it's like it's good for the community, it's good for property values, it's good for the schools, all that kind of stuff. So it is very satisfying to be able to see those properties you know redeveloped and and and you know and looking nice and and and provide you know back kind of in in service, you know doing what they're what they're meant to do.

Peter Neill:

But there's a lot of misconceptions out there, you know, from with investors, you know, and what they think about the areas and the and the investors and the return and things like that.

Peter Neill:

And there's a lot of misconceptions politically and locally with people you know, when it comes to how you know new development is going to affect you know where they live and traffic and all that kind of stuff. And some of it's you know 100 percent makes sense. I live in a town where there's been a ton of development, definitely felt, you know, traffic effects and things like that. But there's a positive to it as well, you know, and it's so it's just it's finding that balance and it's and it's education on. You know what, what needs, what the issue is, and then what are the solutions, and then balancing, you know, because there's not one thing that's going to fix it all and there's not one entity, you know that's going to fix it all. Either it's not like you know everything's going to happen on the public side of the spectrum, or everything's going to happen on the private side, either.

Ed Mathews:

So it's it takes both parties coming together yeah, it's you know that that, mark, going back to Marcus and that conversation, you know it was a public private partnership, right, and it's you know, one of the things that I'm always interested in when I talk to to folks that are in the redevelopment game is, you know, when you look at a property. Right, I want to, I want to kind of step you through your process, okay, cause I want to understand it. So, in terms of finding these properties, like what are two or three ways that you typically are finding these properties that start there, yeah, yeah, you know it's a little bit different in Baltimore than it is in Philadelphia.

Peter Neill:

You know, and they're probably, I would say, are two main markets that we invest in, more so Baltimore than Philly, because of a number of different reasons, a lot of it just having to do with pricing and kind of some institutional New York money coming to the Philadelphia area raising prices over the last few years. And I would say, you know, for us in Baltimore a lot of it is auction sites. Know, for us in Baltimore a lot of it is auction sites. So there's a few auction sites, one in particular, that we have a great relationship with the owner of and we get a lot of product through there. You know it's a lot of good deals that make sense to fit our model we deal.

Peter Neill:

You know, when you have a lot of properties in an area, you tend to get phone calls from wholesalers, real estate professionals, that kind of thing. So that's nice when people are calling you, that's nice. Not everybody has that ability, especially if you're just getting started. You know, but you can call them, you know, and you look for the we buy houses signs and if you have access to, like the MLS and things like that you know. Go to look at the agents you know, look at who's selling properties, look at who's active, look at who has listings, all that kind of stuff, reach out to them, have a conversation, that kind of thing. So we're fortunate, we get a lot of calls and we have a kind of a core, you know, group of wholesalers. You know that bring us deals on a regular basis. And then also, when you're in an area that you've kind of defined as we like this area for a number of reasons, and I always say, like our secret sauce and I wish I was smart enough that we did this purposely. But this is something that kind of happened. And as we constantly analyze what we do and why we do it and what's working and what's not working, all that kind of stuff is, we tend to invest a lot around hospitals.

Peter Neill:

I know when we, when we launched our two funds right now and we were analyzing what we'd done over the last couple of years and how our strategy has shifted and things like that, it was like wow, like 90% of our portfolio is like in this radius around hospitals and the reasoning for that is most hospitals not all of them, but a lot of them do what they call community investments. So they invest a lot in the communities. They own properties around the hospitals. They don't land around the hospitals, they invest in different programs and things like that, you know, into their communities because they don't want to be in war zones, they don't want to be in areas that are heading the wrong direction, they want to be in areas that are heading the right direction. So it was something where we were seeing it as, oh, these are good places for a number of different reasons, without necessarily realizing what was driving that per se. And then you know we realized it's the hospitals.

Peter Neill:

And I mean, when we you know, that's what I love about, like I think it's my Maps on Google. You can put all your addresses into that, you can see everything. You know what I mean. And when you're investing in scattered sites, single family, like that's awesome, you know. And then I love it because, too, like I'm not my partner, ron, and we have some boots on the ground that are really active every day in the portfolio, they could tell you all the addresses. I'm not, as you know, my memory is better with names and faces and things like that, whereas I always forget, like, what addresses that. You know what I mean. I guess I have more of a photographic memory. It's like I could picture the house before I could tell you like what street or number it is. But when you pull it up on like a MyMap, when somebody sends me a property, the first thing I do is I go to that and I see how close is that to where we're investing in, because we do have pretty defined pockets. So where I'm going with that is is when you have the defined pockets.

Peter Neill:

We do direct to owner. You know direct to seller type marketing as well. You know what I mean. And a lot of that's phone calls, and I've spent time in commercial brokerage doing a ton of phone calls, so I'm very comfortable with that. And sometimes it's a letter or a postcard or something like that, but a lot of times it's just you'd be surprised. I mean I actually I just talked to an owner last week. Yeah, they I was, they actually had the property listed and the person was the agent, was not getting back to me at all. It's a great property, we'd like to have it. I wrote in our area right in our wheelhouse and called the. I looked up. The owner found their phone number, called them, picked up in like two rings, had a great conversation, so and I have a million stories like that, so you know just stuff like that. So I would say like the three buckets are the, the sites, the what, the auction sites, the wholesalers and agents and things like that too, on and off market deals and then just direct to own their.

Ed Mathews:

You know direct to seller type stuff as well yeah, so when we're talking about auction sites, we're talking about zone xome, we're talking about auctioncom well, no, the the one involved more.

Peter Neill:

It's called ashland auctions.

Peter Neill:

It's a you know like they're only in like the I think there might be Maryland. I've seen some stuff in Philadelphia on there but like, yeah, it's like one in every you know couple, you know hundred so deals or something like that, and a lot of it tends to be in that market. I think there are offices in Baltimore or, like you know, around the surrounding area, something like that. So, yeah, it's more of like a local. It's just, it's interesting, you know, it's just like, it's just a more common thing, like whereas in Philadelphia you don't really, and I think you could buy stuff on auction sites. I think some of the ones that you were talking about I've seen stuff through there, you know, and I know people that have bought stuff like that.

Peter Neill:

But usually auction sites in Philly are not as common, you know, typically you tend to find deals off market, Like for us. We've certainly bought a few things in Philly over the last year or two, but all of that's come through like attorneys. You know friends of ours that happened to have a beat on. Somebody was moving, you know, or somebody. Actually, I think the last couple that we bought it was like the people were moving, they were, they were relocating out of the country for a job or something like that, and they didn't want the, the man, you know, the out of state or out of country management hassle, that kind of thing Right and speed was important right.

Ed Mathews:

Yeah, yeah, you know it's. It's interesting when I, when I meet with a homeowner, you know, one of the things that I'm one of the things I'm immediately trying to uncover is are you looking to max out on dollars or are you talking speed Cause it's there? You know it's typically there's a blend, but there is gray. Obviously it's not all black and white, but but you know, if you are looking to max out, I'm happy to introduce you to realtors. That, you know, will help you do that over, you know, a 60 to 90 plus day timeframe. But if you need out, like in three to 30 days, like we're working on a deal right now, that's at the back end of a tax sale process and the tax sale is January 20th or 24th or something like that, and you know they basically have a week to get this thing under contract so that we can solve the problem.

Peter Neill:

One thing I would say is like we tend to buy from investors and vacant properties. A lot of them could be what I call like a speculative investor, like so they're not necessarily an active manager or even a passive manager, like they're working with a property manager or something like that. They maybe got into Baltimore at a time where you could really buy properties you know these types of vacant properties super cheap, and then there were just looking for the market to rise. You know which it has. You know it's like some of them I see like where they were able to pick it up for like five thousand or something like that. You know which. You can still find properties like that, but they're typically almost like a lot but the or just a shell. You know the roofs collapse, that kind of thing, and that's great. You know what I mean. Because it's like for us we've run in the construction company.

Peter Neill:

My partner, ron, was a, was a started as a builder, so he he didn't do home building for years. And Gilmer, who runs our construction down there, prior to him working for us, he was a builder, so he was doing mostly new home construction in the DC Baltimore area. So that's a core competency for us. So for something like that, where it's like we can buy it, like our buy boxes. Typically we like to be acquiring for thirty thousand put and putting about one hundred into it or so give or take, yeah, so typically we're all into a property for about one hundred and thirty thousand overtake.

Ed Mathews:

Yeah, so typically we're all into a property for about 130,000.

Peter Neill:

So yeah, that's, that's right now. God, it's up to like two to 10,. You know, it's like we're like blown away and I mean I it used to be, we were well, we used to be all in for like a hundred to 115. Arv at that time was like a buck 65 to a buck 85. And then markets gone up. You know, now we're closer to like one, we're all in typically in that 115 to 130 range give or take, and then ARVs on the low end, 185.

Peter Neill:

But like most stuff we're seeing now is in that two, 210, you know kind of range, with most of our properties falling under like 250, you know, which is really nice. You know what I mean, because that is a like what's the word, you know like a scarce commodity. You know we're not building new homes valued at 250,. You know, I think I saw numbers. I've used it in presentations before. Usually I have it in front of me but I don't. It was like less than 3% of new homes built year over year, like back in July, was like. It was like less than 3% of them were valued under 250. I mean, so it's like that's like a scarce commodity. You know, like we're not creating more of those. So it cause you can't get the land cheap enough and the construction costs are up. You know, especially if you're GC and everything out and things like that. It's just not feasible, you know so.

Peter Neill:

And we do value add stuff as well, you know. But it's nice from a cash flow management perspective when you buy a few properties every now and again that have cash coming in on day one. It kind of feels like it's like buying like a multifamily or like a little, you know something like that, where it's like you have a few units there. They're probably undervalued rent, you know, because our rents are on average, are going to be, for a two bedroom, probably 16, 16, 50. A three bedroom is going to be 16, 50 to like seven, upwards of even 2100 or so. I mean 2000, 2100.

Peter Neill:

So you sometimes will pick up a value ad. So that's usually like a retired or a tired landlord. Because there's a difference, you know. Some are just spending time with the families or going down the shore or something like that. Others are like I've had enough, like I, you know they weren't prepared for whatever reason, or they've just done it long enough and they want to do something else or something like that reason, or they've just done it long enough and they want to do something else or something like that. But you know, and usually, and then, like you get a rent that might be nine hundred to fifteen hundred, something like that, so it's undervalued. And then you have the choice and I mean you bring cash flow in on day one, which is nice, and you have the choice when a lease comes due, if you want to end and go in and add value and maximize the the ARV and maximize the rent, or you can ride it out, depending on where you're at in your portfolio, that kind of thing. So it gives you some options.

Peter Neill:

But for the most part, when you do things the way we do it and with the in-house construction and the scale, buying those blighted, dilapidated homes, it's a pretty cookie cutter. We were talking about this in chatting beforehand. Homes, it's pretty cookie cutter. You know, we were talking about this. You know in chatting before. And, uh, you know it's what you're doing. It's almost like you're rebuilding within the four walls, I mean. So it's like practically construction, but it's it's within those four walls.

Peter Neill:

So the guys know what they're doing. You know, I mean they. They know the demo process. You know. I mean they, they know you know the framing, the flooring, the windows, the kitchens, all the appliances, tile floor, you name it.

Peter Neill:

And I mean, like we do a lot of bulk purchases. We do construction outside of our entities as well, for other mainly investors, some regular homeowners, things like that. So you know we can buy in bulk. You know we never just buy like one refrigerator or something like that. I mean we even have warehouse space where we store a product and that kind of thing. So which is great, you know, because you can get good pricing that way. But for the most part it's like the same stuff going into these properties. So that helps on pricing, helps on, you know, but just it helps with the guys being able to put it in, you know, being able to install it, do it quickly, do it right, all that kind of stuff. And the only really variations you'll see for us is if we get a really good discount on floor. You know, hey, this, this flooring is, you know we're discounted it down to this or this tile or something like that.

Peter Neill:

But the quality has to be there too. You know, when you're going to, quality needs to be there no matter what. You know I see that on the construction side, where we'll work with an investor or something, where they're like, well, it's a flip, you know, so it's just going to be like and it's like we don't operate that way. Yeah, I mean, it's like it's unfortunate. People do operate that way and a lot of times they operate that way because they didn't purchase right, you know, they overspent and now they got to have they got a budget, you know to something that makes sense, you know, so they make some money or something like that. We don't operate that way. There needs to be a certain level of quality, whether you're selling the property and especially when you're renting it, because you're going to be continuing to manage that property you know what I mean. So you're going to have, you know, you're going to be doing the maintenance calls and things like that.

Peter Neill:

And that's another reason we like the new construction, full redevelopment type of product, because it's a lot less work from a maintenance perspective than a value add you know, because the value add, even with us you know my partner Ron's been doing it over 20 years, gilmer's been doing it like 30 years with a value add, even they don't have, you know, x-ray vision and I mean so you might think you know it's all. This is going to be a $25,000 renovation or something. Open a wall, something like that. I mean. So it's like all the experience in the world is still you could still have those things that come up that you just you couldn't really plan for. You know what I mean. So you have to. If you're buying right, it's built into it. You know what I mean. But that.

Peter Neill:

So on the value add side, we do it, we, you know when it makes sense. You know but and we feel like the price is right. You know, and then you have a pretty good idea. You know factoring in the unknowns, you know adding a certain percentage above that, that kind of thing. But it's just for a lot of reasons. There's fully distressed. The other thing I noticed too I always I'm like blown away. I get these wholesaler texting calls and things like that. They'll send me something. They'll be like oh, this is really, this property is pretty bad, you're probably not interested. It's like that's what I want.

Ed Mathews:

And it always.

Peter Neill:

It always interests me how, how many investors aren't looking at that kind of stuff and chances are it's because they're. They're using a general contractor and the construction part of it is going to be a pain point for them. I mean it's going to be constant stress and worry. Are they coming or they're not going to come? You know they showed up for a week and then they disappear, and you know all that kind of stuff. So I understand why investors don't necessarily gravitate. They want more of the lipstick type stuff. I mean something they can go in new flooring, throw paint and appliances and call it a day, you know. But for us it's like you know. No, we want something we can go in, fully redevelop and then either put long term financing in place and manage or, you know, just sell for a markup.

Ed Mathews:

Yeah, we operate the same way. I'm not interested in cutting corners. My worst fear is seeing a house that we rehabbed on the news someday because something bad happened. Right, Sure, sure.

Peter Neill:

And people are going to call you. I mean, if you have issues and things like that, we've done that before. I mean, we've had properties where there was an issue with whatever you know had nothing to do with us. It was like a lemon of an HVAC or something like that and we go back and we fix it.

Peter Neill:

You know what I mean. It happens. So, yeah, most people they're going to call you you know what I mean. Or, if they don't, they're going to complain about you online or something like that, and for me that's like yeah, exactly, you know exactly you want the chance to make it right that kind of thing.

Peter Neill:

But yeah, because your reputation is everything. And the reputation isn't just with investors, it's with your tenants, it's with the subcontractors and things like that. I've seen that before with companies I've looked at investing with and all or people you know, my just like it speaks to their management and uh, and it's just chances are they grew too fast or it's not a priority for them, which scares the crap out of me. So it's just, you know your reputation isn't just with investors, you know it's, it's it's a lot being it's, it's much further beyond that, you know agree more yeah, and even with uh, relationships with town officials, because they can either make your time very easy or very difficult yeah, yeah, inspectors, and yeah, you name it right okay so let's get on to our final five.

Ed Mathews:

Um, cool, I want to. You know I I love to use this to kind of help get to know you better and see how your brain works. I put you through this lightning round and then we'll see. You got the gig, so it's okay. So first thing I want you to do is finish the sentence.

Peter Neill:

My purpose is yeah, I would say my purpose is providing a really great experience to our investors, to our tenants, to our employees and the contractors we work with and stuff like that. You know, my foundation was in investor relations and raising capital. You know, when I started my real estate investing career, I took a job in sales and marketing at a real estate investment company. Very quickly translated that over to the investor relations side and raising capital. So, you know, providing a really great experience to the investors was something that was just super important to me and something that I could see was an opportunity to stand out from the crowd. You know, and just in general, that's just something that I value. You know, like I just general, that's just something that I value. You know, like, like I just said before, kind of a good transition from what we're just saying into this question. It's something that I take very seriously, that I want to see when I make investments and when I deal with any anybody in any kind of sales. You know, anything I'm buying or any experience I'm taking doing or anything like that. So, hey, I would just say that that's where it comes back to. The other thing, too, is is our like slogan that we've adopted recently has been redeveloping with essential homes for essential workers in essential communities. You know so. So, like you said, you know about, you know drives you to get up in the morning. I love what we do and the impact that it makes. You know it's. You can make a the morning. I love what we do and the impact that it makes. You know it's. You can make a great return. You can make a great living doing it. But it's there's also like almost like a philanthropic part to it as well. I mean, when you're going into underserved communities that are essential, you know there's the housing that they provide, the opportunities that they provide, the health care. You know you name it. It's, like we said before, it's on so many different levels that they provide. It's essential and the people that we work with, a lot of them are working bread and butter type industries. You know we do a lot of nurses and things like that because of our proximity to hospitals. But you know people that work for the city and in different, you know, faculties and things like that. So just, you know good people that are doing essential work for the community and that kind of thing to be able to provide great housing for them and to be able to provide a great experience, because I think that's really important in this space.

Peter Neill:

You know, and that's one of the reasons we're vertically integrated and we want to continue to be and grow responsibly is that you, you don't create a monster. You know because I think a lot of people have you know from from personal experience with certain, with other things and that kind of thing, but also, like we're just seeing, you know reviews and things like that online. And you, when you're, when you're a landlord and you're managing properties, you're always going to have issues. You know, you're always going to I've, I've always had issues. You know you could do all the right things, but some people, it's they're in a, they're in a different place.

Peter Neill:

You know personally, for whatever reason, you know and it's and and I don't I don't take it personally, and I mean as long as you can say you, you did what was right, you know, and you, you, you put your best foot forward, that kind of thing with scale, you're going to have issues. It's part of the business. If that's something that bothers you, then this is not the business for you. You know Right, but at the end of the day, you know, I think it's so important that you treat people the way that you want to be treated and and meet them on their level, understand where they're coming from, and and then provide a great experience for it, you know, and just it's just to listen to people, that kind of thing, you know, is just so important. So I think, just create overall, creating a great experience for everybody that I relate to, which kind of builds off a legacy, and I mean, at the end of the day too, so she does.

Ed Mathews:

All right. So I'm always interested in mentors and folks that have had an effect on on your thinking and your perspective as you've grown your business. So I'm curious what's the best advice you ever got and who gave it to you?

Peter Neill:

Yeah Well, god, that's such a loaded question, you know, cause I've gotten a lot of years. You know, solicited and unsolicited advice is the. You know, I was really fortunate when I, when I graduated from college, to go to work for that the mortgage investment company, real estate investment company, and I worked in investor relations, but I was like the right hand man, you know, per se to the CEO of that company and he told me that was like my foundation. You know, like when I, when I first started, it was like practically day one, like in one hand, he gave me rich dad, poor dad, which totally changed my how I looked at things. And I grew up, you know, my father was a property manager, facilities manager, so I grew up like in real estate, from the management perspective and never really looked at it from the owner's perspective, and so that really, you know, tied the pieces together for me and then, like in another hand, was the recording for Earl Nightingale's, the Strangest Secret.

Peter Neill:

So it was the personal development side of the business, you know, because a lot of it has to do with mindset and I see this all the time, you know, going back to tenants and things like that. A lot of times I feel like you're a therapist or something like that, because it's like you know the person could have something going on in your life at work and their life at work or something that has nothing to do with you, but they're they're taking it out on you, you know, because of whatever reason, and things like that. So that really helped to put my mind, the mindsets kind of stuff in place. So I think that's such an important part of this business. But the advice that really sticks out was I did kind of like an apprenticeship type of a deal with he's a commercial broker, investor, developer, spent a lot of time with him and one thing that he told me he got his phone out and he said when I started this business I had a mentor that said to me if you just pick this thing up, you are going to be successful, and that is something that has really stuck with me. And you know I've had a lot of investors tell me how much they appreciate our communication and things like that. I've had people tell me like, oh, I, I'm exiting this investment or whatever.

Peter Neill:

It was making money. Everything was going well in that sense, but I, anytime I had a question or needed something. I just I would call, I would email, and I just couldn't get a response back. You know it was weeks it would take to get something back and all. And you know, so I'm, I'm coming in with you because you know I'm going to put more money with you because of it or something.

Peter Neill:

So it's so important you know that you're communicating, you know and and that you, when people call you, you get back to them. When they email you, you get back to them. You know, when they call you, if you're available, pick it up, yeah, cause, and that can really like on on the investment side of the business, with raising capital on the acquisition side of the business. You know you're, you're, you're going to have better D, you know find deals and things like that. Brokers are going to want to send stuff to you with contractors and all. So it fits kind of every bucket of the industry.

Peter Neill:

But that's probably one of the best pieces of advice that I received and something that I always tell people, because you will stand out, you know, like, in a very good way. I've even had it where people are like you know I wonder like, does he, is he desperate or something? Because it'll pick right up and get bad. It's just like this is just the way that I operate. I mean, I've operated this way for 10 years because I just I'm the kind of guy where I don't like to have something sitting around, you know, for like a stressor Right, but you know literally it causes, I won't be able to sleep as well.

Peter Neill:

I like to, at the end of the day, kind of go through the emails, go through the phone and get back to people. Now, if it's something that I know what it is and it's going to take a moment or whatever, maybe I'll push that to the next day, but I just that's the kind of person I am. You hit the nail on the head. It's a stressor. It's going to cause anxiety, if, if, if I know something's there and I can get to it, I want to get to it right away.

Ed Mathews:

Yeah, our, our effort is our policy in house is, you know, same day return, right? Yeah, whether it's an email, phone call text, you know it takes five minutes and sometimes it doesn't, sometimes it's a longer conversation, but that's okay too. Yep, I couldn't agree more Okay. So we've been talking about the positive and the swings and the successes. I, I, I think personally I learn more from my mistakes than I do from my successes, and, a, it keeps my ego in check and B, it allows me to grow. Right. Pain and growth are often, you know, simultaneous, right, and so I'm curious about a mistake that you've made professionally. You know, how did you recover from it?

Peter Neill:

Yeah, god. Well, you know, I've been really fortunate on like the deal side of the business to constantly have really good mentors around me, you know. So I haven't, I don't think I've made a whole lot of mistakes in that arena. I think there was, you know, because I'm dealing with guys who have been doing it for 20 plus years, I mean so at that point.

Peter Neill:

They made a ton of mistakes. So I was really fortunate to leverage their mistakes and maybe not have to make certain ones. You know because I was able to kind of learn through them. But I would say there were properties early on. You know that we owned in New Jersey and and even in Baltimore and Philadelphia that we've sold over the years for various reasons. Sometimes you know you need the cash for whatever you know, so it was just like, but then you see the appreciation in the market and you just kick yourself in the ass. You know what I mean. It's just like, oh my God, why the hell did I ever sell that, especially some of the Jersey properties. You know Jersey's got a lot of supply constraint but in the workforce affordable housing type stuff and well, it's not. It's not even usually that products you well, I can maybe you call it workforce, but like you know property values there for us we're usually in the 400 range or 300 range or so, but you kick yourself in the ass for that.

Peter Neill:

You know we had another property that we bought in Baltimore where it was um, it was, the location was great but it was bad too, you know. You know it's like locations, like a multi kind of like. I always like a good example of it. To put the pain of mental picture would be like retail behind other retail, like you can be on a great you know I call Westchester, I live right on Westchester Pike here but like a great area where there's a ton of traffic. Yeah, so it's like, ok, that's a good location, but, but your retail is behind somebody else's retail makes it, you know. So it's kind of a location for us. This was a property that we bought that was in a great part of the city. That was that we like and that's moving in the right direction, all that kind of stuff.

Peter Neill:

And when I say that, that's one thing I didn't say earlier is like, because people always ask me, like are you investing in war zones? And no, I mean not at all, like we, we stay out of those as well. You know there's areas where crime is trending in the right way. You know you're always going to have crime in urban metropolitan areas and you unfortunately have more now than you did even years ago because of various reasons and stuff like that. You know, since COVID it accelerated in a lot of ways. You bet, but you know you want to look at. You know where that's trending, but the other part, and then, like you know, just the economy, like transportation and all that kind of stuff. But another piece of it is is are there regular people buying in those areas as well? Because in war zones you tend to only see investors buying. There is there's no regular mom and pop type of a person buying. So we only want to be in areas where we're seeing a healthy amount of purchasing going on and selling going on by regular homeowners. But we like the fully dilapidated ones, because then you typically don't compete with them. You know the average person isn't going to buy a home that needs $100,000 worth of work, but anyway.

Peter Neill:

So we bought this property, great location, but it was right near a bus stop and you know we thought, you know it wouldn't be too much of an issue. And it was. You know it was like you know we could always have at least. You know it wasn't a problem there, but there was always issues. And I mean it was just one of those properties where we're getting phone calls all the time because there's people at the bus stop. It's like a transient area. So and then there was some. I said somebody did something. They set a fricking fire in the garage or something like that. It was. It was like, okay, they crossed the line, it's gone too far at this point.

Peter Neill:

So we ended up selling the property and I think the purchaser was an LLC, I don't know. I think they were turning it to a commercial use or something like that. But it was one of those things that goes back to our. You know, it was a failure and it was a mistake in the sense that you know we typically want to buy for a long term hold. But it was. It was something in the sense that it's. It's always look at properties as can we hold this long-term as a rental and do we see a benefit? Do we see appreciation long-term? That kind of thing. You know, is it ending in the right direction? Everything I was just saying? But if we do want to sell it, can we also sell it right now? You know what I mean, that kind of thing. So we were fortunate to be able to sell it. We made a great profit on it and I think it was like an LLC that bought it. I think they were turning it into some commercial use or something like that, which was probably perfect for it with the way that, where it was located, that kind of thing. So something like that.

Peter Neill:

You know, you live and you learn. But then, like, obviously we're fund managers. I mean so structuring funds that meet, that, satisfy our goals. You know long-term goals, short-term goals, and then you know also satisfying investors, cause there's constant. When you're managing funds and you're structuring funds, it's always that blend for what's good for the deal, but then what do investors want? You know, and trying to get that as close as possible. So we've had various funds over the years. You know where we we had two different funds doing similar things and we combine them together. You know what I mean. So there's been things like that that we've learned from, that we continue to learn from and we'll continue to implement in future funds and things like that as well. So I'm a big believer in constantly looking at what you're doing, what's working, what's not. So yeah, it's. I could. I could go on and on about that, that story right there, yeah.

Ed Mathews:

So yeah, it's. I could go on and on about that story right there. Yeah, and at some point I'm going to make it, because, you know, one of the other things that I'd love to get into although we are tight on time right now is your funds and how you operate them, how you raise money and all that. We'll talk offline about that and maybe we'll get you back to come to just talk about that. So, with regard to sharpening the saw, so to speak and you know, leaders almost universally, are readers in some way, shape or form. They're always taking in new information. So I'm curious, you know, how do you take in new information? What's that book virtual or physical or otherwise on your on your nightstand and who you're paying attention to?

Peter Neill:

Yeah, wow, yeah, that's a good question. I'm in ULI and NIOP, you know, like the industry, industry networking kind of, what do they call those like industry groups? Niop's big for developers and ULI is too, and investors, that kind of thing. A lot on the commercial side of the business as well, which I always like to be dialed in on that because I do so much on the residential side, because I do so much on the residential side, I'm always like to know what's going on in the commercial space. Investors I work with typically are invested in commercials, so it's good to know what's happening and I think every portfolio, a balanced portfolio, needs to have both same with like lending and that kind of thing. But so ULI, niop, I follow those when I get emails from them. I try to go to the events when I can. That kind of thing.

Peter Neill:

Great industry information, data driven research, that kind of thing. I like, like I said before, resi Club. When I get an email from Resi Club, I stop and I, if I have the time to read it, I read it. If I don't, I usually glance it over at least, and then I'll start and get back to it. I love Resi Club, great information, especially for residential type stuff. Jay Parsons is one. When I see his stuff on LinkedIn and all, I usually stop and read it right away. Just good data-driven information. I think understanding the macro stuff is from a trends perspective, stuff like that. It's one of the reasons I like workforce affordable housing is because it's something that I saw as an investor.

Peter Neill:

It's going to be around for a while you know it's it's kind of isolated or insulated whatever term you want to use from a lot of the cyclicalness of real estate, especially on the single family side, because of the financing. You typically we don't utilize commercial loans and things like that, so they're not recasting. You know they're. They're long term, 30 year fixed type stuff. So I that's I think you know they're kind of the main ones like a book that I constantly go back to. And if you've ever been on podcast before, I always say it is when friends influence people and I mean that's literally on my nightstand, like it's well, it's in like a, it's on like a stand next to the nightstand. But I just go back to that all the time and I mean it's just something I like they have like little summary, kind of little things that you can look at it quickly. And because I just think I look at real estate as capital acquisitions and execution, pretty much everything you're doing is going to fall into one of those buckets and no matter which bucket you're in or if you're in all three of them, or you know you're in a combination of one or two or whatever it is, you know your communication, your transparency, the way you talk to people. You know the way you negotiate.

Peter Neill:

You know I kind of like the joke you want to be the nicest son of a bitch in the world. You know you can't be too nice. I mean I've known people who they try to raise money and it's like they're too nice and I mean they just they're not. You know you got to be stern at this time. I mean they probably aren't giving off a, an authority type of a thing I mean, where it's like you scare me with managing contractors or you scare me with managing tenants or something like that.

Peter Neill:

You know you got to blend being nice, but also you can't let people walk all over either. You know so and and and and. You know I always think it's funny, like when you run into issues with communication and you know with, with somebody or something like that. It's like when you're dealing with a with an investor, it's like what kind of investor? Like what kind of manager do you want managing your properties and your portfolio? That kind of thing I mean. So I think that's very important. I mean, but yeah, communications, I mean you name it it's a good resource for it.

Ed Mathews:

Excellent, all right. I'm always curious about how people define success. So how do you define success?

Peter Neill:

in your own terms. Yeah, that's a really great question because I think there's like a short term aspect to that, you know. So, as long as I can hit the bed at the end of the pillow, I can hit the pillow, you know, every night and say, you know, I did what I could, you know, and I had a great day. And you know, we raise some money, we, our deals are moving along, you know, from a construction standpoint. I mean, we're always having those conversations of what are we purchasing, what money's coming in, what are we purchasing? It's that dance between capital acquisitions and execution, you know. And then, you know, are we providing a great experience to the tenants with while we grow and all that kind of stuff? Are we continuing to provide a great experience to our investors as we grow? That kind of thing? The people that work for us we're really fortunate to have a great team around us and have people in place on the construction side, on the property management side, you know, bookkeeping and the accounting side, that kind of thing. So are we treating them well, you know? Are they getting the love and the attention and the respect that they need and they deserve? All that kind of stuff. So, yeah, that's kind of what at the end of each day, that that's success for me, you know. And then, from a long term approach, it's just it's continuing to move in the right direction.

Peter Neill:

You know, I'm not somebody that looks at it as I want to have, I need to have a billion dollars under management. You know, I used to work at a place where they would say that a lot and I mean it was like the BHAG. You know the big, hairy, audacious goal billion dollars in management, which is great, you know, and I respect anybody with that opinion Right and with that goal Right, and I mean I would. I wouldn't say it's not on my list of things to do. But I think what's even more so important is the experience you provide along the way. And are you profitable? I mean because you can have a billion dollars in management, not be profitable I. And are you profitable? I mean because you can have a billion dollars in a management not be profitable. You know what I mean. So it's just like you need to be profitable.

Peter Neill:

So it's like sometimes, you know, and coming when you have older partners, like I do, you know, I'm 32. My partners are 52, 51. You know, there is a good balance there. You know what I mean. Like, not that there isn't. You know issues with it as well, issues with it as well. You know what I mean. But but there's a great balance to. You have the balance.

Peter Neill:

You know, like me, who's like younger, wants to do a million and ten things with them, who are a little bit more. You know they know what they want to do and they're in there. They're defined in that sense and that kind of thing. So it's. You know there's a balance between the short term and the long term, but the long term just moving in the right direction, profitability and creating a great experience. At the end of the day, you know where you've built a brand and a company, because that's another thing too. Like we look at things where we're not just building a portfolio, we're building a company as well, and I think that's a mindset that it's not right for every investor. But if this is your full time job, then you need to think of it that way.

Peter Neill:

You know, because there's a lot that goes into that and that's a big part of what I do. Coming from a firm that was like a small boutique firm, that that was going very corporate, you know, and brought a lot of consultants in and things like that. So, like, corporate strategy is a big part of what I do and the structure and all that kind of stuff and what to focus on and you know, short term versus long term, all that kind of stuff. But very long way of saying, as long as you're heading in the right direction, you know, as in, you know getting getting larger, you know the scale is important in a lot of ways.

Ed Mathews:

So Got it All right. So good answers. I appreciate the way your brain works and, and you know it's interesting, if everybody thought the way you did, the world would probably be a little bit better. But you know I got really good parents.

Peter Neill:

You know that's my foundation right there. Yeah, really fortunate to have, you know, really good parents and my mom was a Catholic. She retired but she was a Catholic school teacher for 30 plus years, so I think I was raised right and that comes in handy.

Ed Mathews:

Yes, it does. Yes, it does. So, speaking of your family, when you're not raising money or fixing blighted homes, what do you like to do for fun?

Peter Neill:

Yeah, well, you know what she came up on my screen there the beagle. So I have a beagle. I got her during COVID. You know, that's my world in a lot of ways right now. I have a ton of fun with her. She's a blast and she's a good balance. You were talking about your dog before we got on.

Peter Neill:

She's probably laying on a sofa somewhere too right now, but if the doorbell rang, yeah, she'd go insane. PRI stands for German Short-Haired Pointer Real Estate Investments. Yeah, we named it after the dogs. If you look at our logo, you'll see the dog and the logo. So it was one of those, like we didn't want to be typecast into any one thing. You know, we, we like what we do and we're going to continue to do what we do and, like I said, I think it's going to continue to make sense for years to come.

Peter Neill:

But it was something where you know, we my partner, Ron, has two of them. My other partner, wade, has one and he's had them his entire life. And I've always been a dog person. We grew up I had chihuahuas and then we got the beagle. So she's a hunting dog like a GSB. But they both told me you know, they're too insane. You know, starting a business, the energy levels are off the charts and they are. You know, Ron's dogs are like nuts, they're literally bouncing off the walls. So but we named it GSP because, because we really felt like they represented our brand well and and just our overall attitude and the way that we show up. You know, they have a lot of energy, they're hunting dogs. They're very focused, very loyal, you know that kind of thing. So we felt like that represented who we were in a lot of ways and kind of the attitude that we take to the business and just the overall kind of aggressiveness but friendliness, pleasantness, all that kind of stuff as well. So that was why we called it that.

Peter Neill:

But yeah, so I spend a lot of time with her, you know, at the end of each day usually take her for a walk. It's a great way to kind of, you know, you know kind of clear your head, that kind of energy. I do spend a lot of time with my folks. You know they're older now. They need a lot of help and stuff like that. So that's great. And my brother just had a baby. She's going to be two in February, so I spend a lot of time with him and his wife and Catherine Her name is. I'm very proud uncle and I do a lot of cooking and that kind of thing. They don't like cooking, so I bring a lot of food over and stuff like that. So that's my kind of world when we're not doing this stuff.

Ed Mathews:

Right on, right on. Ok, so if people want to learn more about GSP or you or anything to do with the business, what's the best way to get a hold of you?

Peter Neill:

no-transcript, think we talked about that. You can always meet us there too, so it's. You know, I always like to be accessible and have a great conversation and find out how we can maybe align with your goals and help you, you know, achieve whatever it is that you're trying to do.

Ed Mathews:

Excellent, excellent. Well, Peter Neill continued good fortune, Sir, and it's good to see you and thanks for coming today.

Peter Neill:

Yeah, thanks for having me, Ed. It was great to be here.

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