Real Estate Underground

Beyond Blueprints: An Architect's Journey into Real Estate Investment with Mark Shuler

• Ed Mathews • Season 2 • Episode 164

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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 making this a part of your day. I'm really excited to have this conversation. I just found out that our guest, Mark Shuler, was the architect to the stars, and we may or may not get into that. I'm a huge music fan, and particular grunge, and it turns out Mark, who lives in one of my favorite cities, Seattle, knows a bunch of the guys that I used to listen to. We're going to get into that, but first, mark, thank you so much for joining us. It's a pleasure to meet you and I'm really excited to have this conversation. Thanks for having me All right. For those folks out there who don't know about SGRE investments or your architecture firm or anything else you do, why don't you tell us a little bit about who you are and what you do?

Mark Shuler:

Sure, my name is Mark Shuler. I am a practicing architect for probably the last 40 years, always what I wanted to do with my life, and then, probably 12, 15 years ago, I started pivoting into real estate investing. I got licensed in 1992 and then practiced traditionally for a lot of years, on my shingle out with two different firms. In 2002, I went to the University of Washington's business school and got a fan certification in commercial real estate development. I've been always fascinated by the industry. I have five family members who are commercial brokers.

Mark Shuler:

My kid brother is the foremost taxation authority for real estate in the country. Just a long career, always real estate related. One way or another, I've designed and built probably close to 500 structures or remodels. At this point, I have a great understanding of the permitting process probably too much and a lot of battle scars to prove it too. At this point, I'm about one third on real estate, one third on architecture, and I've got another business that we're launching right now indoor golf simulator business down in Phoenix. So I'm spending a lot of time on that, building that up.

Ed Mathews:

Are you also an avid golfer, or are you in that just because it's a good business?

Mark Shuler:

Just a good entertainment play and a balance to the other business ventures I have going on. Real estate is you make all your wealth, but it's all equity based, not cashflow. So I needed something that was a little more cashflow based. So I decided after running the numbers I couldn't pass up on this.

Ed Mathews:

So I'm curious about your transition from being an architect to being an investor. Can you walk us through that moment, that series of events that led you to decide that you should, instead of designing these houses and, ultimately, these commercial properties? What brought you into this side of the business?

Mark Shuler:

Yeah, First of all, it's the family business. But more to the point, for me, I was doing a lot of projects for investors and developers and just looking over their shoulders and seeing the process they were going through and the mistakes they were making. Well, if they can do that, I can do that, and I'm just a rabid entrepreneur. Do not have it in my DNA to work for a large enterprise. I wish I did sometimes, but I just have always found that the real estate is like the ultimate form of entrepreneurialism. I guess I'm a bit of a adrenaline junkie. So I like the risk and reward factor, but most importantly, I like the calculated risk. I just have the personality type for it. Oh, you can't wing it On a hope and a prayer. You got to really build a game and get an A game going on to be able to do this successfully.

Ed Mathews:

So you owned a little more than a thousand units, right North of 4,000 units oh, congratulations. And obviously you've been doing this for a while, and so I'm curious about when you look at the asset class out there. Multifamily is where you're most active. I'm curious about your perspective on the market. It's interesting because your market and one of our markets in Boston, they tend to trend very similarly and I'm curious what you're seeing.

Mark Shuler:

You know it's a very controlled market. The headlines coming out of New York City today are a candidate, a Democratic socialist, who wants to enact rent control citywide and also have state-funded grocery stores. I don't understand that component of it, but good luck. Execution is everything. I work in a similarly controlled market. Seattle is historically a labor town. It is now a company town and there's a lot of people who rebel against that and our city council reflects that rebellion. So it's a very challenging environment to be an operator in, to the point where I've sold most everything up here. We have one remaining asset that we're going to probably sell next year, and then I'm done. One remaining asset that we're going to probably sell next year, and then I'm done. I'm done investing in Seattle. You're going to see that play out in New York city. Right, watch it carefully for the next two weeks.

Mark Shuler:

Housing in particular is a free market phenomenon. I have never seen government do it well. Now, anytime government gets involved, it gets screwed up and the flip side of it is there are slumlords out there. I get it, but I can tell you the profit margins in the real estate game and the housing market I play in they're thin. I am not walking away with tens of millions of dollars and drinking Mai Tais on the beach, and all that's not how it works. It is an extremely challenging market right now. A lot of operators are losing their assets, so it's a high risk, potentially high reward game. The margins are super thin. Right, I know plenty of operators are not paying distribution.

Ed Mathews:

And is that because of cost of capital? Is that because they were cowboys and bought poorly? What do you see, some?

Mark Shuler:

of them bought at the height of the market in 21, 22. And they are running on a runway on their loans. They are underwater. They didn't create enough NOI expansion to be able to refi the property and so they're looking at cash-in refis, not cash-out refis, and they're not even neutral. They're taking a risk. Look, lenders, the leverage is lower than what it was when they took on the deal. I doubt it All the way around. There's nothing but risk in this line of work. No-transcript, and I think they're coming up here next. I hope they sue the shit out of Seattle because I'm just tired of this. Yeah, it is a difficult enough business, but then to have government just like enact all this legislation and declare that making a profit on this is bad, it should not be allowed, that's crazy. There's no without reward. There's no risk. No one does any housing and it's not.

Ed Mathews:

I was just having this conversation with Ben Carmona, who was on a previous show about 1031's Delaware Statutory Trust. One of the reasons that legislation exists in the tax code is because they were enabled. The government wanted people like you and me to provide good, clean housing that's well run. They're trying to incent our behavior. I think probably part of it is a rebellion against a guy in the White House not to make this totally political, but I think part of it is just a lack of understanding understanding which you're exactly right how government got out of the business of housing years ago.

Mark Shuler:

Because not only that, I flip over into the architecture side of things. The regulatory environment never stops, and so the drawing sets I produce now, compared to when I first started my career in the regulatory environment, is a thousand times more complicated than it was 20, 30, 40 years ago. You want to see all this housing produced and yet you're just piling down the red. That's why we have a housing shortage in this country. You can drop the pin anywhere in this country, and there's a housing shortage.

Ed Mathews:

I think 2008 wiped out a whole class of general contractors that just never came back, exactly Right, and so you've got a supply problem both both at the construction level as well as the material, for all project mentioned. That whole thing with that post-corona is still. The materials are still out of this world, expensive.

Mark Shuler:

Yeah, and you're starting to see we're at the bottom of the cycle right now. Real estate moves in cycles and we've had a recalibration for the last three years and you're seeing a lot of product types that everybody was prognosticating was on its way to the graveyard Retail office. Both of them is all being absorbed right now. One of the markets I play in a lot is Houston. Year over year, permit activity and housing delivery is down 72%, 24 to 20. And you're going to start seeing vacancy rates go down and occupancy rates go up and it's going to really tighten up and that's going to happen nationwide. So you compare that that's the marketplace phenomenon with this regulatory environment. How do you reconcile all this? That's what's so challenging about real estate right there. I'm just describing it. That's what I spend a lot of time weaving through, trying to make my projects go forward.

Ed Mathews:

Yeah, it's interesting. We play here predominantly in Connecticut. Like I said, we started to look at Boston and a couple other markets, but here in Connecticut, for instance, there was a report a couple of years ago maybe that Connecticut is like 30,000 units short of its 2030 affordable housing projections and that's universal right. There's less. I saw over 4 million units short across the country, maybe more. One of the things that you mentioned and I wholeheartedly agree with is government's got to get out of the way. Forget parties. I don't care what you're talking about politically, I'm talking about just the regulatory environment. Here in Connecticut. We're in a development project right now. It's taken us nine months just to get to planning and zoning. It's crazy.

Mark Shuler:

I live in King County, Washington. A residential permit for a house in King County takes 16 months through the approval process. So think about how insane. Yeah, I talk to people who routinely interface with the government over there. Government is absolutely slow walking these permits because they don't want to see housing development beyond the growth management. We have it around the Puget Sound and they are trying to focus all this development inside out in the rural areas, unincorporated areas of King County. They slow it down. Who can afford 16 months of carrying a piece of dirt? Nobody. It bifurcates society. Only the wealthy can afford to do it. I have a house out there I'm designing right now. It's 31,000 square feet. This is not affordable housing.

Ed Mathews:

This is Bill Gates and friends.

Mark Shuler:

People can afford to do it. It has the exact opposite effect of what the reporting policy goal is and it's just naivete on the part of policymakers. It just drives me nuts. I'm all about life safety in any building. This is the building code, the three-ring binder. My nose is in that all the time, trying to figure out the codes. And it's complicated. The impact of the regulatory environment is a little bit out of control.

Ed Mathews:

So let's talk about asset class and let's talk about regions that you like. From an asset class perspective, what are you hunting for these days? What do you like or what have you tended to like over the last couple years? I'm a housing guy.

Mark Shuler:

I've been my whole career so I stick with housing. I do multi-family and large multi-family projects, so our minimum purchase is 250 units. We're doing the deep value add thing okay and so we're trying to create value where there was none before. And the nice thing about that they tend to be C-class deals. I like 80s product and newer.

Mark Shuler:

We've purchased and renovated older product. You tend to find older wiring, older plumbing, electric panels that need to be replaced. They tend to be deeper lifts than you anticipate, 80s and newer. But then you don't even think about assets go through a major kind of maintenance cycle every 25 years or so the heat pumps wear out, pipes burst. You got to kind of look and see when the last major rehab of the project was. But we do these deep value add plays. So we're spending. Our cost is 18000 a door on the lift. Anybody else it's 35 to 40,000.

Mark Shuler:

And we're turning C-class assets into condo quality finishes. They look really nice and we're still catering to the C-class workforce crowd. We're getting rent bumps of 100 to 150 a month. This is some of the nicest housing these folks have ever lived in. There's a little social mission there that we stick with. We've got a model and I don't look at retail. I don't know anything about it Office product, I don't want to go anywhere near it. That product is stable. People need housing. We have a housing affordability problem in this country.

Mark Shuler:

Nobody can buy a house, so they got to rent. It's a good long-term bet. That's why we like it.

Ed Mathews:

Yeah, I've read article and report after report on the fact that, particularly younger generations, we're becoming a renter nation, right and for 15 years. What other markets are you particularly paying attention to these days?

Mark Shuler:

We have a couple of deals up in Oklahoma city, okay, but at this point we've done a big lift on them and they're stabilized. Yeah, remember, I think we might have even refined those. We're just managing them and figure out what we're going to do next. We might hold those in house and buy out the investors. I don't know, but houston is a ginormous market. Yeah, I don't need to go anywhere.

Mark Shuler:

Our, our business strategy is to, instead of going broad and wide, like a lot of operators, they tend to look at markets all over the country. I can't do that. I know too much about the game and I don't want to have to figure out the personalities of multiple jurisdictions. The thing about Houston is it's like the 34th largest city in the country, second largest apartment market, and they built a lot of product back in the late seventies and eighties during that oil boom, and all of that needs to be renovated. So we just stick to Houston and we've built a large organization, we've got over 200 people on the payroll and every time we take down a deal, we're day after closing, we're onsite, we're renovating. We just have a really developed business model at this point that worked for us. I don't need to go anywhere else honestly.

Ed Mathews:

Yeah, I was going to ask you why. Your turnover or rehab is 18 per unit and the market is 35 plus, right? So part of that is captive or employed your employee base, right?

Mark Shuler:

All of our everybody's on a W-2 and we control our labor. We also control our supply chain. Okay, yeah, so we have direct vendor relationships in India and China and the port of Houston is the largest port on the Gulf Coast. So you know, when we order doors we order a thousand of them at a time, right. And then we had a 20,000 square foot warehouse. Just go grab the container, haul it there, warehouse manager catalogs it, drivers go down and get it when we need it. We're getting slab countertops for 50 bucks a slab. I just price slabs from my own house. It's 1500 bucks. So, and we're just cutting out like three layers of middlemen and our whole business model is premised on efficiency and operations. So the more I drive the cost down, the greater the return for my investor. I know that we return four to five points more to the IRR than most other syndicates.

Ed Mathews:

I imagine part of that is tenant retention as well. Right yeah, In this downtime in the marketplace.

Mark Shuler:

We did two deals in Q4 of last year and those are the only deals we did all of last year. We've literally been on the sidelines for 18 months. Yeah, those both were distressed deals. That operator probably evaporated $40 million in investment equity. That was blood in the streets, but we got those assets at 2018 prices and, yeah, so we took them down. One of them was a real nice B-plus class asset going west out of Houston. They call it the energy corridor. There's seven or eight Fortune 500s that their headquarters are based out there and there's lots of people who work there that need a place to live.

Mark Shuler:

It's just like amenity laden asset. Now that's a step up for us. We're mainly in the workforce housing business, but we're sitting on sidelines right now, still just waiting for interest rates to come down, the bond markets to calm down and I think we're going to be labor problem there's a massive supply chain problem.

Ed Mathews:

The fact is that, yes, the political cycle, presidential in particular, makes people a little bit nutty and that tends to affect the economy. Yet to be determined what the tariff policies and how they're going to affect what we're doing. Inflation seems to be getting under control. The bottom line is that where rates are now historically, if you look at the last 50 plus years we're right down the middle right now.

Mark Shuler:

Between the garden rails. Yeah, people, for the last 15 years we've had this free money floating around. People got that was by that, when you had a lot of people getting into the apartment game, not having ever lived through a more turbulent cycle, yeah, and interest rates that are two points higher than where they were, and it's more challenging. That's the nature of the business. And, to your point, the political thing. I'm decidedly agnostic. Me too. I play with house money and I can't afford opinions and that's the way I think I have them. I just don't share them. That's for couch time with my wife.

Mark Shuler:

The most challenging problem for any entrepreneur and business owner right now is you don't know what to do. Everybody's paralyzed, trying to make decisions for six, 12, 18 months out. And so how do you do a deal now at a certain interest rate? And so how do you do a deal now at a certain interest rate, making a ton of assumptions about the structure of that deal and renovations and lease up, and all that when it is just utter chaos in the political environment out of DC right now. That's as political as I'm going to get in this conversation. It's challenging to conduct business.

Ed Mathews:

It's completely dysfunctional on both sides, but we can talk about that. All I'm curious about it is impossible to predict 6, 12, 18 months out, but how are you approaching underwriting when you're looking at properties and what are your assumptions going into? 26, 27, 28? That's a damn good question.

Mark Shuler:

I read a lot of reports. It's not all doom and gloom. We're at the bottom of a cycle and so we're going to be heading up into an expansion cycle in markets, and who doesn't like that? It's just a matter of how many black swan events and dead cat bounces can we go through before we get there? That's the challenging part. The first thing I do every morning when I get up, log in and check what the bond markets are doing. So I look at the five year, the 10 year, the two year and up to about three weeks ago, the five year was just stubbornly holding to just above 4%, and we've dropped 15, 20 basis points on any given day since then. So they're trending in the right direction, but everybody is on a knife edge, worrying about which way this is going, and our debt level is unsustainable and everything's so leveraged up that even at the government level right now.

Mark Shuler:

So to answer your question, one of the things in our underwriting that we are doing doing we're looking at lower leverage on all our deals because that's what's in the banding. You can't be so rosy in these predictions. A lot of syndicators back three, four years ago. They didn't have a value-add strategy, they were just buying and hoping that the rising tide raised all ships. That is just gambling.

Ed Mathews:

Yeah, I was telling people we were having this conversation a few weeks ago. I made that whole environment from 19 to 21 and probably even before 19,. But made geniuses out of everybody artificially.

Mark Shuler:

But it's go time.

Ed Mathews:

It's one of the work from each of the room, but now it's markets like this that separate the wheat from the chaff, right? I'm interested in terms of leverage right. We're going into deals and underwriting them at a minimum 65, 35 debt to equity and I'm trying to get a low 50 just in anticipation of interest rates not moving, maybe even going up, but definitely not down. I'm curious what you're doing.

Mark Shuler:

We actually underwrite on a continuum. Different lenders have different underwriting requirements and I think we're hovering around 60 on our deals Seems to be a good medium for us. You have to understand. We're expanding our NOI through our renovation and it tends to drive down the unlevered IRR. So that's why we're maniacal about getting the rentals done. We target 5% of the units per month with a goal of after 20 months we're a hundred percent done with the renovation. We will have then really grown NOI and so our leverage goes way down. So we don't have to be so low on the front end going in because we're frequent suppliers. So a lot of lenders know what our exercise is and we have a proven business model. So we can afford to be a little more risky on the front end. Sometimes we get up as high as 70, but that's as high as you're seeing right now.

Ed Mathews:

Yeah, and I would submit that's not that risky, that's more measured, especially if you know your rehab costs are half. Because of the team you have in place, you can move a whole heck of a lot faster than pretty much anybody else in that market. Yeah, we don't.

Mark Shuler:

Third-party anything we don't license trades. All of our asset management is in-house. We have our own asset management company. We have a sponsorship deal, acquisition leg and then we have the management leg. All the construction and management is in-house. We're just trying to do everything we can to control the expense side of the logic there are variable costs.

Ed Mathews:

You have no control over taxes and insurance by being the two biggest don't even get me going on insurance guys saw that coming. I had an interesting conversation with a commercial broker. We were interviewing him for this show, as a matter of fact, and he was talking about what was happening. This was by late 23, early 24. And he was talking about what was happening. This was late 23, early 24. And he was talking about the hurricanes that had blown through Florida, what that had done to the insurance underwriting business. And very in parallel to that, because I started to get interested we were sourcing our insurance for the following year and starting to see the rates climb, in some cases exponentially. Starting to see the rates climb in some cases exponentially, and so I started asking about that and it was eye-opening. The insurance companies were viewing risk going into 24 and 25. That's just another unknown.

Mark Shuler:

I have a buddy who owns a deal in the Ninth Ward in New Orleans Tried to get me an investor. New Orleans is underwater, it's close.

Mark Shuler:

Never gonna so when he underwrote it and bought it, he was paying $850 a door for insurance. His insurance is somewhere between $2,500 and $3,000. You never recover from them. No, and it's in the Ninth Ward. That is the challenges of this business. What we did is we partners got on a plane and flew to England and meet with Lloyd's of London see if we could get blanket policy for our entire portfolio. We self-insure Right the way we keep our costs down.

Ed Mathews:

Smart, spread the risk outside of the areas that are affected by major weather, right, yeah, one of the things you mentioned before we hit record, actually, is that you did a report, or we were discussing that you've written a report about the state of the market. Can you tell me a little bit more about that?

Mark Shuler:

Yeah, look, I don't want to come across as a total Debbie Downer here. This is just a business and any business is all about operation. The best real estate investors are good operators and they have their operations under control. At a macro level, there's actually a lot of good positives out there in the marketplace right now. It's just that we can't gain any consistency as we come off the bottom. So I just really got interested in kind of overall, where we sit in the market, where we sit in the cycle, and tried to read the tea leaves of what we reasonably expect in the next 12 to 15 months. Interest rates have been trending down. They're going in the right direction, despite kind of the political white noise coming out of Washington.

Mark Shuler:

The Fed's done a damn good job of containing inflation.

Mark Shuler:

I did a podcast three or four years ago at the beginning of this inflationary cycle, and the comment I made it still sticks with me is once inflation gets baked into a market system, it is damn hard to squeeze it out, and during the pandemic the Fed and the government flooded the market with money and put the economy on a sugar buzz.

Mark Shuler:

M1 is not a capital floating around the economy. They pumped $8 trillion in the economy and then the CDC decided to do an unconstitutional nationwide eviction moratorium yeah, I think that's, but since then has been buying back. A lot of that are evaporating and they don't actually buy it, but they've gotten the money supply back down to a reasonable level. I think they still have some work to do on that, but it's more easy. Interest rates and inflation have fallen in tandem and we were on track by the end of this year to see the Fed achieve its goal of 2% inflation. This tariff war has thrown a huge monkey wrench into all that. The recent reports I've been reading is there might be a little bump, but it's not blowing up.

Mark Shuler:

Let me put it that way. It seems like the economy is still clicking along. There has been some softening, but I don't think it's going to be catastrophic. Other reports I've read survey of economists. You know 50% think we're going to make it through without going into a recession. There's a variety of opinions of the other 50%. But even in my architecture business I'm definitely seeing a bit of a slowdown in the economy. Yeah, where we go from here for the rest of the year, it just depends on supply chains. Want to see what the shelves look like at the Home Depot in a month and how much plywood's available coming out of Canada.

Ed Mathews:

I'd love to know board foot numbers.

Mark Shuler:

We're definitely. I don't know if inflection point is the right phrase here, but we're definitely. It's either going to go one way or the other and it just unfortunately hinges on the whims of one person.

Ed Mathews:

And buckle up Once I'm able to go retrieve that in my email. Thank you again for sharing it. We'll certainly make that report available in the show notes. We'll go from there, all right. We've been talking for quite a bit of time and normally we go about 25, 35 minutes. We're already at the 40 minute marks, but I don't care, because this has been gold. Maybe we'll break this up into a two part series. One of the things I'd like to do is go through our final five. Okay, and I think we've gotten a really good insight into how your brain works. But I'd like to dig a little deeper. Somebody like you who has been very successful the mortgage is handled, the college education's handled, the car payments are handled, and yet you still get up on Monday morning and go to work, and that tends to be purpose.

Mark Shuler:

And I'm curious when your eyes open on Monday ADHD and he's got anxiety and depression comorbidity and so I've mentored, raised him since he was like 13.

Mark Shuler:

And he still has challenges in life. He's high end. He didn't go to college. He went to six high schools. I mentored him throughout all of that. I had to send him to a military high school. He went from a 1.4 to a 3.8. It's not that he's stupid, it's the executive functioning right, yeah, processing right, but he managed to pull it together. Go to trade school. He's a high-end Audi mechanic. Now they're going to park $100,000 vehicles and he loves it. He's learning about how to flip cars and so he flipped a couple of. Recently. He's got a walking around money. He's feeling good about himself. So I get up just to be a role model and then I get informed like this and to impart my knowledge. It makes my life meaningful.

Ed Mathews:

I tell people I'm not a grandparent yet. I have younger daughters. They're 22 and 17. But I tell people all the time, being a parent, step-parent or parent, it's the best thing you'll ever do, Most important thing you'll ever do, for sure. I'm also curious about your growth and I want to ask you a couple of questions about that Mentorship. You mentioned that in the previous question. I'm curious about the mentors that you've had along the way and what's the best advice you ever got and who gave it to you?

Mark Shuler:

one of the things I glommed down to earlier in my career was those rockefeller principles being a part of masterminds, finding coaches, just associating with people who are smarter than you or maybe more experienced than you. I've been able to do that. My whole career, just the nature of my career. I'm not designing such a new housing, but the whole nature of my career is also one of mentorship. So as you come out of architecture school and you get your first job or two, you're working in an environment where you're being mentored by more senior architects. It became a mantra or model for me of how I wanted to migrate through my life. I still do that to this day. I'm part of a mastermind. I just dropped 10 Gs on and it's the smartest thing I ever did in the last three years by far.

Mark Shuler:

I am constantly on a growth model. I do not know everything as an architect. I sit in front of this box all day. Who am I going to know? So you got to force yourself to get out there and force yourself to tuck your ego aside and just learn and grow. Once you stop growing, you die. I'm not ready to hang it up by any stretch of the imagination. I am still moving forward. You have to be very forward. When you look back, you're depressed. When you look forward, you're totally neurotic, and so you've got to find a balance between being forwardly propelled but living in the moment, and that is a life work balance that I struggle with. Any busy professional is going to be that. That's the best advice I can give you.

Ed Mathews:

And so I'm also interested in. I fundamentally believe that we learn more from the mistakes that we've made over the course of time. I'm talking professionally, right, but in this context I'm talking professionally. I'm curious about a mistake or a decision that you would love to have back. And what was it? And how did you recover if you didn't?

Mark Shuler:

We reevaluate every deal we do. Hindsight's always 20-20. And some of the deals we bought we've had to really roll up our sleeves and put some elbow grease into it. Hindsight probably wasn't something we should have bought. We'll get through it and we'll achieve our objectives, but it's been a lot of work. Operations is everything in multi-family. If you don't have your operations down or if you try to sub that out to a third party, you're going to be disappointed. I think just every deal I've ever had. I have regrets, others more than some. But you dig down deeper and do diligence. You don't buy an impulse. You stay very data-driven and you do your research in the marketplace. One other thing getting the right partner in life is everything I mean. You're married, you've got kids. I would not be where I am without my compassionate partner who puts up with me and keeps me grounded Wonderful.

Ed Mathews:

Yeah, I find that, no matter how hard the day is, when you walk in the door into your home and you have somebody there that is truly supportive and a life partner and will help you figure out and help you process what just happened in the last eight, 10 hours, getting up the next morning is a lot easier. It's funny, I tell my wife all the time we've been married 29 years now and every year when we celebrate our anniversary, I ask her what were you thinking? Because, as a friend of mine says, in talking to his partner, it's his husband's. They've been married, I don't know, 12, 13 years maybe, and he said it's two or three of the happiest years of his partner's life. So you got to be it's always an interview for us guys, we're just like stupid puppy dogs and someone-.

Ed Mathews:

Yeah, I'm a 14-year old wrapped in a 55 year old's body. At no time. I am no peach to live with, I can assure you. I'm curious about growth. We talked about mistakes and how you approach that but I'm also interested in how you take in information, whether you're a reader or you go to conferences or your network or whatever and who do you pay attention to these days in terms of the way you gather information?

Mark Shuler:

So I follow a lot of folks on LinkedIn who and I try to use the same principles I was just telling you. I try to find guys who are smarter than me, who have better data sets than I do and who can impart that data to me. I've got like 20 people. I follow on LinkedIn religiously and I'm always reading their posts. I get up every morning and the first thing I do every morning is I'm online absorbing as much data as I can. You have to be a data junkie. You have to build a large macroeconomic model in your brain to be able to successfully execute in this business, because you've got to understand how actions promulgated by government today are going to look like six, 12 months down the road and what that's going to do to your business.

Ed Mathews:

I have a mentor who's always talking about pattern recognition.

Mark Shuler:

And you don't get up and read a newspaper one day and have it all. This is a success habit that you just have to embody and then all of a sudden, you become a data hound and you can't live without it. I don't know how many hours you have to do through repetition for it to become a habit.

Ed Mathews:

It's what? 21 days or something like that.

Mark Shuler:

Just get into the habit. But if I can't figure it out, put post-it notes all over your office reminding you to do this Next thing. It'll be ingrained.

Ed Mathews:

Even if you spend. I was talking with a softball coach about this this morning over breakfast. He was talking about working on a skill for 18 minutes a day. If you work on a skill for 18 minutes a day for one year, it's 100 hours. Yeah, and you are ahead of 95 of the people that don't do it consistently so recently I started getting really curious about this concept called time block.

Mark Shuler:

I use it and it's changed how I work. I know when I'm certain times of the day I can do certain tasks really efficiently. I know when I get up in the morning. I've got from eight to 11. That is when I'm fresh, my brain is rested and I can make decisions three times faster from eight to 11 than I can from one and. And then by 4 o'clock I'm toast and you go off and go relax with a light beer or something like that. And I'm an early bed guy. I go to bed at 9.30 every night and so I get to hang out with my partner for a few hours.

Mark Shuler:

Yeah, and you just need to adopt these habits. And what's really interesting about this? The last point I'll make on this is once you adopt the habits, it becomes much easier to adopt other habits because you're already in the mindset. You've already adopted the mindset to be open to that concept. You just get better and better, and really a lot of what we do is time management. So you just get better at these tasks. All I think about is efficiency. How can I do things more efficiently?

Ed Mathews:

Good things will come from it and the last of the five questions. I'm curious how you define success in your life.

Mark Shuler:

Funny thing is it's not monetary. At the end of the day, I can give a rip about that. It's not how I define success. Anybody does anything just to chase a buck. Good luck with that, but it's just not how I define it. Never actually been that motivated by money. I need to pay the bills, I stress about it like anybody else, but chasing money for money's sake is just sort of lost on me. I'm an ideas guy. Success for me just looks like doing good work, being a good partner, being a good mentor to my stepson, being a good grandpa, I think, opening up, receding and closing down, maintaining. Look at the end of your life, the only thing you got is reputations in your relationship. Nothing else matters. It's the journey of getting there that forces you to figure that out, because we're all knuckleheads as guys. That's how I think about it. Do I want to have a secure retirement? Yeah, but guys like me never retire. Excellent.

Ed Mathews:

All right, hey, mark, I've really enjoyed this. I thoroughly have, and so I'm curious. One last question about your business, and then we'll wrap this up. When you're not working, what do you like to do for fun? How do you spend your time?

Mark Shuler:

Yeah, take care of your health. First thing I do on Thursday mornings I go work out with my trainer. Worked out with him today and I think about my health a lot, so that's one thing. I don't obsess about it, but I'm trying to make better choices. I'm almost a vegan. I have a BMI. That's the same as when I was a freshman in high school you just got to take care of yourself. It's a marathon, and that actually is fun for me, believe it or not.

Mark Shuler:

Also, relationships are really, as I've gotten older, I've learned to treasure those Like my kid brother and I were talking the other day and he's 62 and he's going to retire, worked hellacious hours his whole career, the managing partner of one of the largest CPA firms in the country. So we're just having a brotherly conversation and so I look for meaning that's for me. I never for meaning that's for me. I never clubbed. I don't give a shit about that. I used to do a lot more outdoor activity, but managing businesses is very time consuming, so I don't have time. But I like to hang with my partner. We like to go out and do things, and right now we're working on the house, so we're executing a minor kitchen remodel. She's got an art background, so we argue about that insensibly. You can't take any of it with you, so you might as well enjoy the ride. I'm just always constantly trying to figure out ways to enjoy the ride more and become less of the jerk.

Ed Mathews:

I would love to learn that.

Mark Shuler:

Yeah.

Ed Mathews:

Yeah. So, mark, like I said, I really enjoyed this conversation and getting to know you and talking in general, if people want to learn more about SGRE Investments or you, or want to get in touch, what's the best way to do that?

Mark Shuler:

Yeah, you can just surf over to my website, sgreinvestments. com. There's contact me link there. You can just send me an email. Or you can just send an email to investor at sgreinvestments plural com. I'm in front of this box all day long and you hit me up with an email and you'll probably get a response in three minutes.

Ed Mathews:

Good to know. All right, Mark Shuler, thank you so much for your time today. You were very kind and generous with your time and I'm grateful and continued good fortune, and I would love to hear more about that golf project, so we'll maybe talk about that offline.

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Ed Mathews - Clark St Capital

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