Ben Miller – Forging Technology into Real Estate Investing (Part 2) (#20)

“First ask ‘What is the conflict of interest?’,” Ben Miller Ben Miller Bio See Episode #19 Show Notes (cont.) Ben Miller talks about lens for risk (2:30)Think about scenarios that “could go wrong” (2:45)World class downsiderWhat if the developer goes bankrupt?Planned for downturnIn 2017 he thought it was too frothySeth Klarman thinking (3:45)Inversion thinking- What’s the worst that could happen? (4:10)Dynamics in private market are different than the public markets (5:00)Process of investment (5:50)Invest as a secondary or preferred lending investment- 55%-80% (6:30)Preferable to invest in equity on a wholly owned basis (7:30)Not interested now in JVs as alignment is not in focus (7:50)Aim to have a direct relationship with developer/owner (8:30)Fundrise only a 1% feeJV structure of 90/10Real estate deal is much more efficient now due to marketing to perfection (10:00)Vertical integration efficiency is the optimum (11:45)The most vertically integrated companies are most “antifragile” (13:00)Benevolent Dictatorship (15:00) Real Estate Market Perspectives Avoid cyclicality of specialization (16:00)Staying in one product type is a flaw (17:10)More multifamily developers (18:00)Have to be “on trend” and look at the future to invest (18:50)Difficult for developers to be agile among product types (20:30)Not normal in real estate to be flexible (21:15)Core Office and luxury apartments are the next “suburban office” and will decline in value (21:40)Multifamily is mostly neutral in performance (22:40)Core customer doesn’t  want to be in small units except due to cost  (23:00)Shift away from small spaces will cause it to suffer (23:45)What does customer want? (25:10)Move south (25:20)Not in major citiesSpreading to whole different regions (25:50)What happens when technology devalues location? (27:00)It’s easy to see what deteriorates but not easy to see where it appreciates (27:35)Adopt the work from home model (28:10)Iterate first hand opportunities to work from home to test it out (28:30)Ride the trend and figure it outCustomer wants to be successful without doing harm (29:45)Wouldn’t sacrifice return to benefit societyLast mile industrial (31:25)Last mile data- 5G will be everywhere in 24-36 months (31:40)Infrastructure (32:40)Real Estate slips into the background (32:50)Most real estate has been built for Excel Spreadsheets (33:10) Fundrise Team and Platform Iterate on team (34:10)Smart peopleLow EgoAttitude to “dig the ditch” (34:50)Knowledge less importantDesire to learn-Intelligence is “smarts minus ego” (35:30)Discount your desire (36:15)Recruiting and hiring is a privilege (36:30)Learn and listen to find out internal motivation (37:00)Look for candor (37:30)Platform success-Luck and chance (38:10)Getting on the right trend (38:40)Software engineers mak...