Building A $125M Construction Portfolio At 27

Maximilian Vollmer: And the one thing is, like, wholesaling, we did it, but I hated every single day of it. The whole, like, negotiation, you're buying data, and then you go in, you convert it on both sides with the seller and with the buyer. You're consistently, like, weaseling your way in to make money. Running a wholesale business on a high scale, making multiple 6 figures a month is it's a process. So you have to be that perfect sales process CRM.

There's so many different pieces. It's not just, like, cold calling, making an offer. There's so much to it. We realized that every time we try to grow, we kind of hit that bottleneck. We start spending more to make more, so we ended up making the same.

There was always a fear of losing everything. And with wholesale and fix and flip, it was always unpredictable because every month was a new chase, a new hunt. You're going out there. You don't know what you're gonna make next month. And it was stressful.

And then construction really is different because you've

Steve Trang: Welcome, and thank you for joining us for today's episode of disruptors where millionaires are made. Today, we have Maximilian Vollmer with Valmar Real Estate Investments. And Max flew in from Tampa to talk about how he's built a $125,000,000 construction portfolio at the age of 27 years old. I don't know which number is more unbelievable, the one twenty five or the 27, either way, kind of envious. Guys, I wanna mission to create millionaires.

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Maximilian: Yes, sir.

Steve: Alright. So we were just looking right before the show. You were here three years ago.

Maximilian: Mhmm.

Steve: Right? And we're talking about how you went from your Olympic journey to, getting in the wholesale and then just having a lot of success right out of the gate. Yeah. But you've pivoted your business model. But what's happened these last few years?

What's going on in Max's world?

Maximilian: A lot has happened. I mean, the the first few wholesales, I think I mentioned that when we first had our interview, we did wholesales to developers back in the days. We just flipped vacant parcels to developers. So we always had that intention to someday end up in ground up construction because we just love the vision of going in, creating something new, something sexy. And, construction, obviously, is one of those things in real estate.

It takes a while to get there. Yeah. You cannot just do a fix and flip. You can get, you know, lenders. It's easy, but construction is about the resume component.

So we had to somewhere really build that repetition. But I think the the most important piece was when we finished college. When I say weeds, me and my wife. We moved to Tampa. And back then, three years ago, roughly three years ago, Tampa was really more of a fix and flip market.

Mhmm. It was COVID. Everyone moved to Florida, crazy market. Anyone made money, right? You bought a house, and you just did not do anything.

You sold the next day for 50,000 more. It was it was nuts, but it was a fix and flip market. And then with interest rates kind of changing and the whole politics and everything changed, environment changed significantly is where fix and flips did not move anymore, because everyone bought houses three years ago at 23%. And so you're not going to sell that house to buy the same house. No, it's 7% interest rates.

Maximilian: Mhmm.

Maximilian: So the only real buyer that came into our market were out of state buyers, New York, Chicago, Pennsylvania, West Coast. A lot of people with money because jobs are relocating. And those people obviously need to buy a house because they they don't have a house locally. So it was really that out of state buyer. And it was really particularly because they were really only looking for location.

Now, obviously, Florida, a good location is underwater. You wanna be near water, ideally, and flood zones, hurricanes, major risk, new construction just really started to pop up. Everyone was looking for new construction. And then things like Helene and Milton just reinforced everything where entire neighborhoods got wiped out, but it doesn't mean, like, people are not gonna start living in those areas. It just means everything is going to be redeveloped.

Mhmm. And so as this market kinda shifted, we saw it early on where the city came in, rezone major areas to higher density, twenty, thirty units an acre town on developments. We saw a lot of acquisitions from Chicago hedge funds, Miami hedge funds coming in more downtown to build these, like, high rise condominium developments. A lot of it is, like, the Miami Stars, like a half, hotel, half condo. Mhmm.

So that that has been successful in Miami, and they're coming to start doing some of these products here in Tampa. So when that really shifted, we saw a lot of money coming and a lot of huge acquisitions, a lot of stuff in entitlement. And that's when we made that shift from flips to construction, because essentially, we had, like, this perfect timeline.

Steve: When did you make that decision?

Maximilian: That was two and half years ago.

Steve: So right after? Yeah.

Maximilian: Fairly soon after after we we were here because that was really when the when it changed. And from us, you know, when we initiated wholesale, we understood how to acquire properties Mhmm. And how to do our due diligence. And and the city changed the zoning. It's not like they post on Instagram and say, hey.

Your property knows three units an acre. Mhmm. So people did did not know for the longest time. Realtors had no idea, and homeowners didn't know. And we

Steve: But their value of the land, their property is on increased in value.

Maximilian: Yeah. They were unaware. The density changed. Yeah. Because the city has a five year plan.

So when all the activity came in from COVID, the city made changes five year, ten year to allow for more density, for more growth because, obviously, that's how they're gonna make money too. So that came in. It was not like a public announcement. So we attended all of these, like, public meetings, city official meetings, zoning meetings to see what's happening. We looked at the future zoning map, and that's when when we started acquiring properties before everyone else knew, those ones tend to be multifamily zone properties in in downtown locations.

That is how it all started. Our first property that we ever acquired, actually, we just broke ground. It's been, like, the longest one out of all of them.

Steve: So let's take let's take a step back. Okay. So, the market shifted.

Maximilian: Mhmm.

Steve: Did it impact you? And the market shifted where it was like you felt like you got, caught and you're losing money, or you just made the change because you're like, hey. Like, we've always been interested in developing. Let's just get into developing.

Maximilian: Both. We definitely got caught. Okay.

Steve: What happened? With with the

Maximilian: fix and flips, I guess we we were lucky, but it was not intentionally. It's not like we had a crystal ball. Mhmm. We just really, like, had a a lot of inventory that was completed. And then as we tried to acquire new properties, we saw the market shifting Mhmm.

That it was not necessary inventory we got stuck with. We just saw it was a lot harder for us to acquire properties that made any sense. And then just kind of stepping two steps back and looking at our competition and talking to other people that do fix and flips, but then eventually see that everyone's turning them into rentals because nobody's moving them.

Steve: So you didn't necessarily get caught holding on the properties or taking a big loss. It was you saw that the environment has shifted, and you're like, well, I don't know if I still wanna play this game.

Maximilian: Yeah. Plus, obviously, resources. We spent a lot of money marketing leads. So we wasted money day off not converting them into anything. And then we really just made that shift where we said initially from today to tomorrow.

We're like, okay. Let's change operations. We let go of a lot of people because it was more of a fix and flip wholesale division. And the one thing is that wholesaling, we did it because it was the easiest way to get started in real estate, but I hated every single day of

Steve: it. What did you hate about it?

Maximilian: I just like the the whole, like, negotiation is is high stress in my opinion, because it's like you buying data, you're spending money from to a degree depending on your strategy. And then you go in, you convert it. And it's just like this on both sides with the seller and the buyer, you're consistently, like, weaseling your way in to make money. And it was stressful.

Steve: Yeah, it's it's a grind

Maximilian: It is a major grind. I mean, it's it makes money. It's a low risk to a degree. Right? Because you don't have money out.

But it was a grind, and it was not something that we enjoyed. And, in my opinion too, running a wholesale business on a high scale, making multiple 6 figures a month is it's a process. It's a very system process oriented business. So you have to be that that perfect sales process CRM. There's so many different pieces.

It's not just, like, cold calling, making offers. So much to it. And we realized that. And we realized that every time we tried to grow, we kind of hit that bottleneck, we started spending more to make more. So we ended up making the same.

It was like, why we just keep making more and never the same net margin.

Steve: So I'll give more effort.

Maximilian: In time. How conversion is that? And what freaked me out the most of, you know, when we started obviously with no money, there was always a fear of losing everything. And with wholesale and fix and flip, it was always unpredictable because every month was a new chase, a new hunt. You're going out there.

You don't know what you're gonna make next month. It depends on what leads you're getting. Literally don't. Yeah. So every month was like a roller coaster.

And it was stressful. And then construction really is different because you're filling the pipeline. You don't get paid tomorrow. You get paid in eighteen months, twenty four months, depending on the the the project. Mhmm.

But it's a pipeline. You know, it's coming. And so you can eventually start breathing more than, like, the consistent chase. So you still do your acquisition, but what I've seen in construction is just everything is, like, four steps down. It's a lot more slow paced.

You know, these projects take time, and you do permitting. There's not something they need to do every single day. Yeah.

Steve: That's the part that's more stressful for me. Really? Yeah. I rather be in the grind in the household and wholesale because, like, I at least there's something I can do every day.

Maximilian: Yeah. Right? I mean, don't get me wrong. That's something you can do. It's just everything is, like, stretched.

Steve: But the permitting process, waiting for somebody, that is where I really struggle. Yeah. I was like, hey. Where are we gonna permit? Hey.

We're gonna permit. Alright. So alright. So you made the decision to pivot. Mhmm.

And you start saying, alright. We're gonna develop something. Did you get money first or did you just acquire first? Did you change your targeting? What's the first thing you had to do to go down this developing route?

Maximilian: Faith. Because we knew nothing about construction at point. Never build anything. I understood fix and flips. Obviously, construction is entirely different than fix and flips.

We never raised money before. Because in fix and flips, we never needed to. Mhmm. And so it was really, like, everything was brand new. We didn't have the labor.

We didn't have the workforce internally to convert to construction, so we let go of a lot of people. It's also like we did not wanna have overnight as high. So we literally let go of the almost the entire team, which is me and my wife's thing. Like, we we we rebuild everything from ground up, in ground up construction Mhmm. And just kind of went out there, looked for lots.

We we came across this major opportunity initially, which was a land in Downtown Sarasota. We acquired it for a million dollars, and it was worth 2,500,000.0. It was just the realtor did not list it, had no idea about the zoning. It was zoned for 100 units an acre in that what? 100 units an acre.

Mhmm. So high rise, high density development in one of these districts. There was an overlay. You could have gone up to 300 units an acre. And it was initially, it was half an acre of your quiet neighbor.

That's almost an acre. So we could have done a 300 unit apartment building. Building. So

Steve: maybe she listed it for something that could go for 100 units. But in reality, you knew with one, no,

Maximilian: they didn't enlisted for 100 units. Oh, she listed. They had no nothing. It was just the length. They didn't know the zoning.

Steve: Oh, so she just listed the land. Okay. Got it.

Maximilian: So the the realtor had no idea about what he was selling. It was just some Google Map pictures. It wasn't even he didn't even drive out there. Mhmm. And it was sent to me.

And by accident, I was in Sarasota. So I was like, I'm just driving by and checking it out. Had no intention. And then I drove by, and I said it was a five story multifamily going vertical next door, which on his pictures was not there because whatever he pictures he used, there was just land everywhere.

Steve: Google Maps.

Maximilian: Yeah. And I was like, Hold up, there's density right here. So I looked up the zoning and realized, Dan, there's a lot of density here. And it was, like, right before Sarasota started to blow up. If you drive through Sarasota now, it's just one high rise after another.

Yeah. A lot of money came down there to build these condos. So we acquired that property, and that was, like, the first journey, essentially. We took it under contract and negotiated with the seller to have a extended closing, so twelve months close.

Steve: Twelve months. Yeah. So you see the property. They don't know what they've got. Mm-mm.

What was it listed for?

Maximilian: It was two parcels listed for 500 each.

Steve: 500 each. But same seller? Two different sellers. Two different sellers. 500 each.

Maximilian: So initially, there was one listed, and then the realtor helped us get in contact with the other owner Mhmm. And say, well, for the same price, they would like to buy yours too. Yeah. So he made it work. He got commission on both eventually.

Steve: He's happy. Yeah. Yeah. Okay. So you're in for a mill.

Maximilian: Mhmm.

Steve: But you said it was worth 2.5. Yep. As it as it was, redevelopment? Yep. Yep.

Okay. And So you found the deal. No one else found the deal. You could have paid quite a bit more, and the numbers would still work.

Maximilian: Mhmm.

Steve: That was

Maximilian: one of those things. So we had it in the contract. We were debating of just wholesaling it or maybe doing some preentitlements with some architects, spend $30, and then sell the vision or just going down a path of believing that we can take it down. And, you know, the interesting thing, we took this under contract. We had no resume to even build that.

Mhmm. And initially, I thought it will take a whole lot faster to get to permits. Now it took me two and a half years to get there. In the meantime, I've built 30 houses a year, so I have the resume now.

Steve: Two and a half years Yeah. To get it permitted.

Maximilian: Yeah. I mean, it's because we started adding more and more lots. So it was initially those two, and then we added two more. So it's like a 24 unit, townhome subdivision now. So there was a lot of complexity in just everything.

Until US,

Steve: it was attached.

Maximilian: Yeah. Okay. We started acquiring the other parcels and kind of made it one subdivision. But because it was the the density itself and the zoning took us down the path of the commercial zoning with the city. Mhmm.

And there was a public hearing, school impact analysis, traffic studies. It was all the nine yards. It's not just like a permit. It took so long to get to, like, the initial development, the review aspect, then get into permitting. And that's just like that process took way too long.

Quite frankly, we had no idea about what we were doing initially.

Steve: Well, it was your first one.

Maximilian: Yeah. So it was the first one and probably the hardest one. But everything turned out perfect because when we had it under contract initially with the initial design, we got appraisals done. Back then, it was supposed to sell. And these are just three story townhomes, 2,100 square foot, three bed, 300 bath, two car garage standard with a rooftop.

We're supposed to sell for $4.85 a foot. That was the market back in 2023. Now, we just broke ground. So we just got the construction on the appraisal over 1,000 foot.

Steve: But that's one way doubled

Maximilian: in value. Because all the condos nearby are selling for 1,000 foot. Nobody is nothing you can buy for 1,000 foot. And that changes the game now because, like, all of a sudden, right, we really, like, doubled our profit margins without even, like, doing anything. It's the same product that we designed two years ago, and it's just we finally get a permit.

We just the delay that we had caused us to be phase two versus all the other developments came in earlier. Mhmm. And they kinda set the price standard. They went at, you know, $7.75, some of the early ones. And then every two units they sold, they just went up.

And what was really interesting, it was different developers, and they all met. And they all just came up with the same increase in prices. But nobody

Steve: went to that.

Maximilian: No, they met on a monthly basis.

Steve: No, I know. Yeah, it's kind of collusion.

Maximilian: So we just say, Yeah, yeah. So that was, it was the same agent to almost an all of them this selling all of this. And I was like, wow, you guys are just making these numbers up. But people were absorbing it. A lot of cash buyers, a lot of New York buyers in Sarasota.

And yeah. So that was really the one that started. But when we had it in a contract, we first of all, knew nothing about it. No had to be any capital, but it was the deal was right. There was not hard raising capital for a deal that you buy for a million, it's worth 2 and a half.

There's a lot of So

Steve: let's talk

Maximilian: about it.

Steve: So a million or 2. Mhmm. You close on it. How fast?

Maximilian: Twelve months.

Steve: So you took twelve months to close on it. So you're already doing other deals in the whole this whole time. Why are you working on this one?

Maximilian: Yeah. I mean, it was the first one we took under contract, and we went hard on just raising money. That was the one thing. Why twelve months? That was just why they negotiated with the seller.

Because it was like a contingency to a certain approval process with the city Mhmm. That we can close it subject to the development review approval, and it took roughly twelve months. So that's why we had, like, a con contract contingency. The seller was not necessary, like, and I need to stress. It was vacant land.

So we went back and forth. They initially wanted $4.50. We offered him 50,000 more and said, hey. We're gonna close in twelve months because we're also trying to acquire a next door neighbor. So there was a lot of, like, moving pieces because we had it first on the contract.

Human said that we acquired the other one, and then we renegotiate with everyone. Okay. We're gonna redo everything we just did because we're adding more density to it. So it gave us time because we had no money to close on it. So we took that time to really raise capital and really because the project made sense, we worked so hard.

This allowed us to then scale to multiple different developments.

Steve: So let's so let's take a step back. So then now that you have it tied up, if you don't I imagine you've done your due diligence at this point. Mhmm. So your number one priority is to raise money.

Maximilian: Mhmm.

Steve: How did you raise money? How much or or I guess step one, do you know how much you have to raise?

Maximilian: Yeah. Well, it was the million for the land, 200,000 for entitlement. So we came and raised 1.2. That was the goal for, like

Steve: But that doesn't take into account the construction. So this is different now. Yes. So 1.2. So you went out to go raise 1.2.

Maximilian: Step Mhmm.

Steve: Stage one is go raise 1.2. Yeah. How did you do that?

Maximilian: It was really, really hard. I tell you this because the one thing is we don't come from money, so our parents had no money. I knew nobody even money because everyone I knew was, like, 24 or 25 in college, some athletes, you know, where would I go and be like, hey, I need 2,000,000, 1,200,000.0, whatever it was. Right? So it was really hard initially and, really just by by accident.

Like, the one thing I've always learned in sports initially is like you got to visualize and believe it and live in it like it's already happening without it being real. So that was really the thing where we just meditated every single day on, like, people coming out alive if we're closing this deal. And we we walked the problem, and we felt like we we're going to take it down. It felt like it's already happening. Things will come in place.

And it really just happened. I met a guy in a gym. I wore this Oregon shirt, and he's like, you went to Oregon? I was like, yeah. I went to Oregon.

And he's like, yeah. I went there too. So he ended up he sold the gym. And he had some extra capital to invest and he wanted to get in real estate. So it was like the first guy is like, I love this.

Let's go. You know, you're an athlete to your jack skull. And then he connected us to some people. And it was just like a snowball effect of them, like, them posting about it because they're excited and then their friends and family members seeing it. They had the fear of missing out and it just kind of built this this pattern of people that reached out.

And then we just really had a lot of people fly into Tameper. We showed them the market. We showed them some other competitive product. But it took a year to raise essentially 1,200,000.0. It was 26 investors buying.

So a lot of $2,550,000 dollar payments. Nothing, like, major. So it took a while. We used that momentum then to expand. So it took us almost a year to raise 1,000,000, and then it took us another year to raise 20.

It just from from one to another, it just

Steve: Well, so you raised the mill here. Well, you need a 1.2. You close on it. Mhmm. Then I gotta build this thing.

Yeah. You see, it just broke ground.

Maximilian: It just broke ground. So, yes, this past weekend.

Steve: This is past weekend. Two and a half years later. What was the holdup from closing on it to be able to break ground?

Maximilian: It wasn't a holdup. It's just that process took really long.

Steve: Mhmm.

Maximilian: Sarasota is every municipality is different. And so I saw that was like, you submitted, you waited two months for them to respond. And then they they don't even give you all the comments. They give you some comments. You make an, you know, adjustments, resubmit two months, and then some comments.

So it was it was a nightmare because it could have just given us all the comments at phone, but it was like, no, he's like 10 work with it. Now here's a question. Okay.

Steve: I have a follow-up question. Answer. I have a follow-up question.

Maximilian: Yeah. It was it was painful. And then I've been going it was like three or four different zoning people that came in because as I've done the permit, there was, like, people are just getting let go, new people came in, and then they just starting over. Yeah. And then, like, they made comments that somebody else already made.

We already, you know, adjusted them. So it was a long process. But conceptually, like, a project that size would have learned now is they take a while because it's it's not just the the building complexity of it. In Florida, we have the stormwater retention system, underground water systems. So because all the rain has to go somewhere.

Yeah. And that's the most complicated thing to design. Because, like, a building code is a building code. An architect can design based on the code. It's really clearly defined, but the underground is not defined.

So there's, like, a million different ways to get it done. So every engineer designs this differently, and then the city sees it differently. So I would say 70% of the time, it was just back and forth with the underground the defining what's the perfect system that can capture all the water, and it's up to code. And then with the hurricanes, things changed. They made some modifications.

The state made modifications on how much water has to be captured. So then we had to redesign certain things. So we're kinda like in the loop of everything changing a little bit. But I guess it turned out to be perfect timing because if you would have, you know, finished that last year, it would have been devastating because last year was really Florida. Nothing sold.

Steve: Yeah. That was a tough year. There's two of them for 500 agents for a mill, but you also connected a couple more lots, you said.

Maximilian: Mhmm.

Steve: So does that all go into the same permitting?

Maximilian: No. Just three different permits, but it's one development. Mhmm. So we divided it so we can start phase one and then add phase two and then phase three. So we didn't, like, connect them.

Okay. Doesn't make sense. Yeah.

Steve: And now you gotta raise money to build this thing.

Maximilian: No. We already have it there.

Steve: So it was 1.2. So where do you get the money to to like, you you broke ground. Like, what are you using to build that?

Maximilian: So right we just on this last week, we had a equity firm, Clueders Capital out of Tampa Bay. Mhmm. They put 5,500,000 in equity in. Mhmm. So it was, the first equity firm that invested with us now.

And then we have a construction lender for 12,600,000.0. Mhmm. Everything in that that stage is lined up here.

Steve: Okay. So you got, an equity firm to invest, and you got a loan to build this. Those very large numbers. Yeah. The stress?

Maximilian: Well, more so excitement. Excitement? This one has been, you know, my baby from get go. It was, like, the one that we started this journey with. Yeah.

It's it's amazing to see, and I always tell people it's so funny. It's the first one that I restarted, but we've already built, you know, 30 other projects in the meantime that we took ways later on the contract. Yeah. So we kind of learned a lot to be better where we are right now. We have other town owned projects now that are about to be done that we acquired way later.

And

Steve: So, how much do you anticipate, development costs? Take aside take out what you put into it so far, actual developing this, this project?

Maximilian: It's a good question. So we we have built a similar product in Tampa and Sanpete before. So we are right now at two eighty a square foot heated. Mhmm. And we're selling for a thousand square foot.

Heated? Heated. Yep. What does that mean? Well, per heated square footage.

The way I calculate is, obviously, like, some some developers look at it from a total square footage. So meaning you need to include the garage. I always go heat it. So your ratio goes up slightly, but then you can compare it to resell value.

Steve: Like, bill

Maximilian: it for 200 and sell it for 400 and all kind

Steve: of well making. Heated as on the connected air conditioning?

Maximilian: Yep. Got it. Yeah. $2.85 a square foot. Heated.

Okay. That's why we built those three story masonry block impact windows with the rooftop. We're probably gonna add $30.40 dollars a square foot in finishes, wood flooring, roof appliances. We'll have on the rooftop, there's two options, either sauna, cold plunge, or a six person spa. So we upgraded them slightly to what we do in Tampa and San Peek because the market obviously is paying a whole lot more for it.

So we're kinda adjusting to that. But we have

Steve: $2.85, gonna be a thousand.

Maximilian: Mhmm.

Steve: You guys sell it for. So those margins are pretty good.

Maximilian: Yeah. I mean, we're gonna be all in construction hard and soft cost at 12,000,000. That's the construction loan, which is conservative. Our current actual loan that we have you know, we've bitten out the whole project with 8,800,000.0. That's the buffers.

There's always delays, things that we account for. So we got a $12,000,000 loan, but, essentially, the $12,000,000 loan covers everything, plus there's a million dollar interest reserve. There's soft cost reimbursement working capital already packed in. So 12,000,000 is ultimately our highest possible cost. Mhmm.

Ideally, it will be, like, between 10 and 11. And then if the equity end of you selling them for, 25,000,000 or just appraised for 25,000,000 today's value, I think we're probably gonna sell closer to $26.27. Yeah. Because we see everything is getting more expensive. So we're gonna do the same thing.

We come in with market and maybe start increasing our price per unit as we sell them.

Steve: Yeah. So for a first baby, it's gonna do pretty well. Yeah. Yeah. Yeah.

Those numbers will work. Besides the permitting nightmare, how long it took? Were there any other lessons you learned there?

Maximilian: Countless. I've learned everything. Patience. Yeah. Believing.

I mean, this this was, like, one of these projects, right, where we just went in and we had faith because we had no money initially to acquire. We knew nobody with capital. We hadn't even we knew no GC. We had no resume. Like, we could have not taken this deal down.

It was absolutely, like, even, like, taking it down and believing in it was, like, a white shot of just faith. Right? If I would have acquired this property now, I'm like, okay. Yeah. We've already had a resume.

We have lenders. They know us. Back then, it was just this, like, faith and really the the learning of, like, everything coming together by just you believing in it. I mean, there was so many days where I just I was really frustrated. I was struggling.

I was scared of this property not going through because, like you said, we had 1,200,000.0, but I knew it's gonna be one day. I get the permit, and then I'm gonna need a few more million to get a construction on. Mhmm. Where's the money coming from? Alright.

So we really just believe that it's gonna happen and worked our way towards it. And so there was so many learning lessons from just believing in yourself and not being afraid of of these bigger projects, because we could have just gone a single family house, build one, then next year, build two and kinda went went this path. But I think it kinda set us up where we came in way bigger than we were supposed to chew, and we just grew with it. Mhmm. We grew with the pressure.

We grew with the assignment, and we accepted the challenge, and they really multiplied everything for to where it is today.

Steve: Okay. So I know we're gonna talk about how you did 30 deals in between. But all in all, it sounds like developing is a crazy cash cycle. Yeah. An insane cash cycle.

So I know wholesaling is stressful for you.

Maximilian: Mhmm.

Steve: But I know if I lock it up, I can get paid in a couple of days. Yeah. Like, I know if it's a deal is good enough, I'll get paid in a couple days. Yeah. You don't have that here?

No. So for again, for you, you feel like it's a stress the the grind is stressful for me. I I I love it because we can move really fast. Yeah. How do you get mentally comfortable with these crazy long cash cycles?

Maximilian: That's when we started adding smaller deals like single family developments because they take twelve months, which for me, that's really fast. For you,

Steve: that's Oh, really long.

Maximilian: Really long. But really, you know, when you think about it, it's it's the first year, year and a half that is stressful. Because when you start the first product, you take it under contract. Sooner or later, you sell it. If you do it correctly, you sell something, like, every quarter, every six months, every year, depending on the size.

So once you get through the first sales cycle Mhmm. Then it's easier. Because then, like, there's money coming in. There's other projects in the pipeline. You just keep selling and keep making money.

But, yeah, the first year was really stressful, and it's where we had to, let go of a lot of people, had our overhead as much as possible, and just went back to the trenches. It was just us working twenty four hours as you get in, going in, doing all the hard work, and Mhmm. And setting up the system. But we believed that there was, we believed that was the right thing and turned out to be the right thing. But quite frankly, yes.

I have some people that work with us that are wholesalers or flippers, and I always recommend them kind of go both directions. Do not give up the wholesaling because it will take you a year or so until you comfortably say, okay. Let's close this chapter. Yeah. Otherwise, you go in and you just start chewing.

Steve: I was just talking to talk to me about the second deal.

Maximilian: The second deal was then really just single family houses. Mhmm. So we had that town on there. We realized, okay. Well, we gotta actually, no.

The second deal was a five unit town on development in Saint Pete, which was a single family house that we bought. Mhmm. And the zoning changed. So that was one of those. We bought a lane for 400.

It was worth 800. Because the zoning was right there.

Steve: And And the people that are selling have no idea.

Maximilian: No. Mhmm.

Steve: I mean,

Maximilian: that was an interesting story because the lady that owned the property, she was 84. Mhmm. When we first and it was it was three different streets. There was 65 properties that got resolved. There was not a whole lot.

So when we realized this, there was a hedge fund out of, Michigan that came in. They bought a few of those to build 30 townhomes. They were like the first ones that came in. So they were in permitting and not under construction. It's and none of the neighbors really knew what's happening, but we knew about the permitting.

So I came in one day, and I literally just knocked every single house because there's not that many. As I'm not wasting my time on cold calling or sending a mail, I just go there right away, and I close it at that very spot. Because there's not that many like, the beautiful thing in construction is there's not that many possible targets. Because when you look at one zoning, obviously, yes, it was all the same. But zoning equals the lane size.

So there could be a big house on a small lot that's gonna be worth more on appraisal than a small house in a big lot.

Steve: Mhmm.

Maximilian: If you're looking at width, street furnish,

Steve: where

Maximilian: can I pack as many units as possible? And oftentimes, right, the house is the same size than the one next door, but I can do two units here, five units here. I can offer a whole lot more there. And there was a scenario there that probably, as a fix and flip, probably would have had to acquire for two sixty, two sixty five. And that's what the lady had initially had offers at $2.52 60.

So when he came in, she said, oh, I have five offers here already. You know? And I wanna sell the property. So we build a relationship with her, and we realized that she was really sick. She had four, five strokes.

She was in really bad condition. So we sat down with her with herself, her care provider, and her kids. We're like, how much money do you need to live the rest of your life? And it took him a few weeks, and he came back. They said we need 400,000 roughly to cover the next few years of medical expenses and, for her to relocate to New York to a senior home.

And we're like, okay. We give you guys $400,000 for it, even though there was a 140 over everyone else's offer. But I knew it was worth it. And I knew we did the right thing, and, there was an emotional closing because we she was so excited about it. And we always promised to maybe close to bring her a Subway sandwich because she was always talking about it.

And it was really devastating because we closed and she passed away three days later. Literally, we came there to say, you know, thank you and celebrate. Nobody was there. I called her caregiver, and he he was like, well, she was in the hospital two days ago. She came in at a store, and she didn't make it.

So it was, like, perfect timing for her. And she couldn't even, like, actually enjoy a single cent of it, which is all into her kids. So it was really sad, but we still did the right thing. We gave her what she needed, and, the value was still in the land. You know, we spent less than 100,000 per unit, which is amazing.

You don't really get land that cheap in in Tampa Bay. So that was the second deal that we took. We basically, a lot of the investors that are invested in the first project also invested in this one because they just love the market, and it was only a $4,680,000 raise down slightly less. We had them come in because that one was more faster. It took Mhmm.

And a half the time to get entitled. It's under construction right now. We have drywall done. There was a second deal. And from there, we really got momentum because we had two really good properties in great locations.

Yeah. Huge upside. And then we kind of went to the the regular single family path, because that's fairly simple. Single families. You know, you go in a good area, you find a distressed property, tear it down and rebuild.

Steve: Sure. But what I'm hearing from your first two deals, that made them great deals

Maximilian: Mhmm.

Steve: Just because the the sellers didn't know the value of the land. Yep. So you get that margin. Yep. Right?

But also, like, you know, it's, you you're negotiating with more information than they've got.

Maximilian: Mhmm.

Steve: Going to single family, you lose that advantage. Yes. Yes. So how do you make up for that? Or

Maximilian: So with single family, you kinda make up for it because it's a shorter timeline. So with single families, we usually have an 18 to 20% margin. So on a million dollar house, we make kind of 80 to 100,000. We know that for a fact because it's the way we design. If we reverse engineer, on town homes, you have a different margin of 25, 35% because it's economy of scale.

A lot of the expenses are shared. Permanent expenses are shared. Underground is shared. The land is divided by multiple units. So you make your money there, but it's also less scalable because you gotta find the perfect lot and the right zoning and the right location.

Everything lines up. So it's you can't just, like, go in and say, I'm gonna buy 10 different lots that I can do town on Sunday because you might only get one or two. Whereas a single family is like, well, you can find 10 houses. If I need to buy 10 today, I can find 10 somewhere. Mhmm.

So just kinda where we came in today and go, well, single family, we can at least cross the cycle, make money sooner, learn, build a resume, and acquire them as a more essential piece of the learning lesson, less of, like, you wanna be single family developers. Yeah. In fact, I would like to not build any single family houses anymore, but it was a really good learning lesson. And we had these markets because the market or the demand came in of people wanting to live in these flooded areas, in these waterfront communities. And so it was it was a little bit more hard, I would say, before Helene to find good properties at good prices.

You really had to dig deep. And then Helene came in, and it was like I mean, anyone was selling it at the price you need because it was just it changed the market.

Steve: And I guess for you, since you're doing tear down Mhmm. New construction, flood damage is irrelevant.

Maximilian: No. I don't even look at the house ever. Just by like,

Steve: you can just look at it in Google Maps.

Maximilian: Yeah. I look at the width and the the length of the left, and that's all I do.

Steve: All that matters. Oh. Yeah. And then he comps. Yep.

Got it. And so then when hurricane came along, it actually made your job easier.

Maximilian: Yeah. Helene and Hilton really opened up, I think, a once in a lifetime opportunity because let's talk about beach fun. You've been to Clearwater Beach, St. Pete Beach. Pretty nice.

Indian Beach. It is nice, but it's also, like, nineteen twenty houses. One story. You compare this to Fort Lauderdale, entirely different. Yeah.

But it's prime beachfront, one of the best beaches in The US. I would argue that our beach is much nicer than Miami. But it was too hard. It was impossible to get in. Because before lean, you had to buy these houses now for $8.50, $1,000,000.

Meaning if you're paying a million dollars for land, you have to build a 3 and a half, $4,000,000 house in a minimum to make money. So you have to be at 20% of future value. So but then there isn't a lot of nineteen, twenty houses. You cannot just put a full million of a house in there and hope it's gonna sell. Nobody's gonna buy that.

Mhmm. And that was the issue why there was absolutely not a single new construction in the entire in all these communities because it was too expensive. Anyone who bought there just bought existing inventory to live in that same house. Helene came, boom, everything changed. But it was not just Helene, it was initially the insurance companies.

You've seen it in California over them making pressure to the cities to say, if we don't change things, we'll not insure you guys anymore. Mhmm. That pressure came. And then the city say for the first time in history said, okay, this year we're changing things. We're evaluating the damage, and then we're giving you guys a substantial damage to that.

So if 50% of the depreciated value of the house has been damaged, you have to tear down the building versus beforehand, anyone can renovate. You just get your insurance money, you renovate. Same house gets put back together. They said no. If you had more than 50% of damage, which most houses, if it's a 1920 build, the depreciated value is like a $100.

Mhmm. So any one of those has more than a 100,000 in damage. So the city says, boom, you cannot do it. To a degree where they even filed a lien on a property. So if you try to renovate and sell, the lien would trigger and you can't sell it.

And that obviously now took essentially the the value of the house away. So everything was just land basis. Yeah. And then there's a lot of people that have mortgages. Now your house is worth half of what you paid for it.

So you had to just get rid of it. And that is what happened. I mean, you go on Zillow right now, on the last six to twelve months on the coastal side, there's just hundreds of these red dots sold properties at 300. It's just a bunch of sold properties. Mhmm.

Because it was a shark tank where everyone came in, and we bought waterfront properties for half 1,000,000. They were listed for 1.2 before Helene. Seven days later, we bought the same one for 500. Yeah. So it ended and it changes the game because the it's predictable now.

Forced market appreciation. Right? We've seen it in Fort Myers when the first hurricane three or four years ago hit there. They've seen the biggest, market appreciation in history because everyone is coming and building new. So we see now across the board between 400 and 500,000 is what people spend on land infill.

Mhmm. Meaning, everyone is gonna be at least $2,000,000 house. Otherwise, you cannot make money. You can buy it for 500 to make a million dollar house. Flood zone, you know, you have 26 foot pilings, new construction.

The cold is high velocity flood zone. It's it is expensive to build. Yeah. So but then you understand of the amount of new doors coming in. Now nicer two, three, 4,000,000 old houses is gonna look a whole lot more like Fort Lauderdale.

So the next two or three years, you will drive down the same beach and you're in an entirely different area. And values will go up through the roof because then anyone who's able to not sell right now distressed and just hold two years, they'll come on the other side and will be good.

Steve: You said once in a lifetime opportunity, how many of those did you buy?

Maximilian: As many as I could. We just closed on six on Friday. Was it last week Friday? We we keep buying. Because the stuff is just sitting on market.

Like, even even the ones I bought, they were just sitting on market.

Steve: They just pencil out really easily. Each one just pencils out.

Maximilian: Yeah. Because it's like a funny thing is, you know, people come in and they're like, well, this one sold for $3.80. I'm not gonna spend $4.50 on this. Well, you're back one year ago. This same house was listed for a million dollars.

Steve: I'm

Maximilian: still buying it for $4.50. Yeah. It doesn't matter if he's 70,000 over the guy next door. Everyone is gonna build. You just build a nicer house.

Yeah. So, really, the location is is there, and it's it's the funny thing. When you see, like, properties don't everyone has the same lot size.

Steve: It's a

Maximilian: beautiful thing. They're all identical 50 by a 100. And then there's a house here for 400. There's a house here for 700. Both of them have to be torn down.

Why would somebody spend 700? So there's just stuff listed as unreasonable. And then there's others that just price it to sell because everything else is selling for 400. Yeah. And so that's kinda where where it is.

We have a really strong buyers market right now. The market has been slow. It's politics. It's interest rates. There's a lot of things, outside of just, like, the local market.

And then the hurricane came in and it really just dropped values. Because anyone who's now doing an appraisal, those things appraise for nothing because all the comms are like the stress problem.

Steve: That's so good.

Maximilian: Yeah. Yeah. So it's it's hard making the numbers work of, like, an as is value because everything is just valued lower. You know, when I came in and bought a waterfront house, I destroyed all my comps because all of a sudden I'm buying it for half 1,000,000. Mhmm.

Everyone is, like, what the fuck? You know, you're just buying it for a little, but that's what happens. And, nobody's buying it just to to hold that house because he can't renovate it. So everything is going to be new construction. So we we came in strategically.

We acquired eight different properties in Indian Rocks Beach and Reddington Beach because those are the two areas that allow for short term rentals. Mhmm. They've always been short term rental markets, really high demand, short term rental markets, and have really good data, really good statistics in the long run. We always have demand. Florida has high tourism year round, but, basically, every every week got wiped out.

So you have demand, no supply. Mhmm. Anyone who's coming back now, new construction is going to capture market share.

Steve: Do you find there are other people developing in the same area competing against you, or do you feel like you kinda, like, kinda have this weird monopoly right now?

Maximilian: No there's others for sure. I mean, there's there's others in across the beaches. Right? There's a lot of different developers doing for sale product. For us, we chose those three areas for a reason because we can sell it.

We can keep it as a rental. We can also sell it to investors to keep it as a rental. Mhmm. And not only have to sell it to an end buyer because those areas are really unique. So that's that's kinda where we took advantage of that.

And, this auto's as well, we just kind of came in. We had our first one under construction, supposed to be done in May, and really just made that decision to say to scale this up as far as many of them as we possibly can. Because if we have eight properties, you have more of a market share than if you have one. So from a pricing perspective, you can be more aggressive. You can really just make a difference because it's big enough for us to really make a change.

So that was that was the game changer there. And then it was the the vision because my my wife, she's a short term mental design company, so she kinda understood the the assignment of if we go in, we go all in. So, like, the the stuff that we build is, like, prime, beachfront, location with a pickleball court, golf area, spa, outdoor gym, everything. Right? So it's not just a house of beds.

It was built and designed to be a perfect trophy asset. And that's Which

Steve: house has a pickleball court?

Maximilian: Every every house has a little different theme. We have one that has a pickleball court. We have the one that we're building right now that's, like, Tulum Mexican Mexico inspired, a more resort feel. It's a moody, dark, tropical jungle, a lot of tropical landscaping that is more the spa. And then we have the fun house with, like, the pickleball court and the golf.

And so it kinda every every room, every house has its own design, own theme. And the village just allows for this for us to kinda capture the market because four bedroom has already made $200,000 in Indian North Beach historically. Right? But it was just a house with a pool and regular four bedrooms now coming in, having a a house where every room has its own bathroom, one of those things. We have ADI ADU compliance, so we have elevators.

You know, everything is is built to be a perfect experience. And then, obviously, the design, the amenities, you have a gym, you have a spa, hot tub, cold plunge, it changes the game. So coming in with with those things, I think we're going to be really successful.

Steve: So we're saying we started this two and a half years ago. You just broke around here. In the meantime, you did between 30 developments.

Maximilian: Mhmm. How

Steve: many developments have gone on right now?

Maximilian: 65.

Steve: Yeah. 65. That one's going on right now.

Maximilian: Yep.

Steve: That's not stressful.

Maximilian: It is. It is. It's it's full time. And if you started construction initially to be passive, when we have any of, like, five or 10 project, you feel like everything is slow paced. You have the stress of, like, well, we're not making money today, but, like, everything takes a while.

You can kind of breathe this gaps of, like, you're not really actively involved in. And now it's just, like, twenty four seven. Because, like, that's that's just I have 65 different construction laws, 65 different drawers, different bookkeeping, different invoices, different contractors. So it's a full business at this point.

Steve: Yes. It's a full business.

Maximilian: Yeah. Yeah. So it is stressful.

Steve: Five different, developments. How many doors is that?

Maximilian: 65.

Steve: 65 doors. Mhmm. Okay. So with all that, how are you balancing all of that? Because, like, for me, I don't know.

I never really got big into flipping. I I preferred wholesaling. Right? So I think flipping maybe had, like, three or four going at a time, maybe.

Maximilian: Mhmm.

Steve: And I can't even fathom from 65 going at a time. Yeah. How do you manage all of that?

Maximilian: It's a lot of eighty twenty. Focusing on the 20% that really matters. There's so much you could possibly do where it's too much to even handle. So, like, every evening after work, I really sit down and just plan the next day. Like, what is really important tomorrow?

What is the 20% that I really need? And then over time learning, obviously, that 80% has to be outsourced. They They cannot just always push it on the side. It has to be outsourced. So it's the the management of people.

I think the one thing in in construction, unfortunately, is you're dealing with a lot of subcontractors. And believe it or not, a lot of them just do not know how to write an email and know to, like, respond to a phone call or just be like, they have when you need them. It's just they know their trade, but it's sloppiest people to work with. So it's a babysitting of people every single day. But from a management perspective, it's really just having the right people in place.

What I realized is, you know, I'm great in in underwriting properties. I'm great in raising capital. I'm great in having division. I understand absolutely nothing about construction. Like, if you and I will do You understand?

Nothing. I'm not I'm not the guy to change your light bulb.

Steve: I'm not gonna ask you to, to swap out the panel.

Maximilian: No. I will be the last one to do

Steve: it. Because, it's just You replaced the toilet?

Maximilian: No. No. Nothing. And and that's really what I realized. I was like, I have no idea about constructions.

I need to put people in place to understand it. I have an understand financing, understand numbers, understand the things about the construction, but the subcontractor trades, how things, you know, fade in, walking the property and calling something out. Me, it all looks the same. And then my my superintendent is like, this is all built wrong. I'm like, oh,

Steve: you know what? Why I was at a great flipper. Because I because, like, on the final walk through, it was like, alright. Like, I walked through. I was like, okay.

That looks fine. That was that makes sense.

Maximilian: Yeah. Why I

Steve: was so horrible at it.

Maximilian: But you get good at at what you do, and then you outsource people that are better than you and you have things.

Steve: I'll source all of it. Yeah. I couldn't do it. Yeah. I was an unreliable person to do a final walk through.

Yeah. Figured that out pretty quickly. Yep. Okay. So I guess it's three years ago.

Right? Like, that you were here, talking about, you know, your adventures in wholesaling.

Maximilian: Mhmm.

Steve: A lot of people right now are watching are wholesaling. In fact, a lot of people right now that are watching have been wholesaling, might be going through some difficulties wholesaling or flipping.

Maximilian: Mhmm.

Steve: So what have you learned in this journey? Because a 125,000,000 in projects, lot on the line here. Yeah. What have you learned along the way that you wish you could give to your younger version of you who's really young. Younger version of you who's, hustling with wholesaling.

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Maximilian: Wholesale I mean, see, the thing is, I still have done wholesale last year. I've wholesale six or seven properties. I made $885,000. Mhmm.

Steve: And it

Maximilian: was just deals that I had no money to take down myself, so I sold them. But the thing is, when when you are wholesaler, and I've done this wrong initially, too, is you're like eight different markets. You're everywhere. You're like just buying the same data everyone buys, and you just hope for somebody to buy. You don't actually go and learn about your market and be a true expert.

And that that changes the game. Like, when you're in a market and you really understand what is happening, what business are relocating here, what major developments are happening here, and how can I make this work to make money because the deals that I've sold you know, there was a deal as an example? I took on a contract for 300 k. I realized there was a hedge fund out of Miami that bought the lot next door for 14,600,000.0 Mhmm. Building a 450 unit luxury condominium on there.

Well, I just bought it for 300. Had it on the contract for a few months. Sold it for, for 5 $4.75 because then, you know, the vision was there. Mhmm. I was like, well, here's the renderings.

Here's the approved plans. You know, he's in newspaper articles. So it's a lot easier to to sell. But, also, like, when you when you do, like, a specific wholesale, the way I do it is, like, a sell division. And because I would have taken it down regardless.

So I showed him, like, here's the comms. Here's a floor plan of a house that I would have put on there. Oftentimes, I've already built a house. It's just like this the floor plan. Here's the exact cost.

Here's the appraisals. Here's the profit margin. So the performance, here's your land. Here's your soft cost. Here's your hard cost.

Here's what you're gonna sell it for. Here's how much money you make. And it's where, oftentimes, I took properties under contract on the MLS. Then I'll contract for 600, sold it for $7.50 next day. Mhmm.

And they saw I made a 150,000, but they're also still gonna make 800,000 on the back end. Yeah. But for them, it's like, well, I still make a lot of money as long as the ratios work. Mhmm. For us, it's usually a 100% return.

Right? You gotta put $400,000 in data construction on. You wanna make 400,000 on the back end too. So it's a one to one ratio. As long as you can provide that and when you really understand it as a wholesaler, you're super valuable because in markets like Tampa, it has a lot of development.

Developers and construction companies do not have an acquisition on. They know what to build. I mean, they sell that the mercy of wholesalers giving them deals. Because then they're like, oh, what's next? Let's go out and look.

Because they don't look all the time, but they look when they need it. So that's what I've learned is when I come in and obviously have the repetition as a developer myself, but even by the wholesalers that I've taught that, they come in and

Steve: they're

Maximilian: like really selling the vision. They're using our floor plans, using our designs. You know, you can you can console the auto developers to to get an understanding how much it will cost to build a certain house and just having that vision because you're not taking numbers from nowhere. These are legit numbers. So you're selling this to somebody.

You can make a lot more money. Mhmm. Because we made a lot of wholesales. We made five k, 10 k's, a lot of, like, small numbers. You're just trying to flip the contract really quick.

But when you go back and really study your market and identify opportunities right now, you can make 6 figures on a single sale. You don't have to do a 100 wholesales. You can make 5 work, and you still make plenty of money. Yeah. You don't have the the marketing.

You don't need the sales team. You don't need the closers, acquisition team. You know, all that to really operate on a high level. It can just be you doing the diligence, knowing the market really, really well, and and then find those properties. Mhmm.

Oftentimes, like I said, zoning. We get a single family on a country that's owned five units. You can sell this to a developer making a lot of money right away because you saw the vision, you understand the zoning, and somebody's gonna love it. Right. Right.

Steve: So what I'm hearing is two different things. A, there'd be a lot of markets going deep in your market and becoming the expert in your market. Yep. Heard that. And that's not necessarily newer information.

It's not said a lot. Incredibly value is easy to overlook. For me, the bigger thing is that, a, you guys go to hearings. You go to zonings. Yep.

You're paying attention to what is readily available, but you can't just pull a list for. Yep. Right? You just go to 10. It's like, what are they saying?

What is the city saying they want to see in their city? Yep. And how can you be the professional? You ask a professional. Go create the product the city wants.

Yep. Right? So that's that's that's one part. The other part is they can't beat you down on your price because you're like, here's the cost, right? There is you said soft cost, hard cost.

Here's the vision. Here's what, it would cost with my contractors. By the way, here are my, the people I know with money. Right? Here's access to capital.

Mhmm. So you're providing the property Yep. The the vision, the the cost The concept. Yeah. The whole Concept.

Mhmm. The the labor material or the labor, access to labor and access to capital. Really like anyone can do it. Yeah. Like you're just as long as they have the money, they can use all of Max's info, knowledge, and connections and go make way more money.

So if I got $400,000, I don't need to know a lot as long as I know Max. I could turn that 400 into 800 is what I'm hearing. Yeah. I mean, does Is that accurate?

Maximilian: I would say so. Yeah. I mean, there's definitely developers I've sold properties to, and they they literally build the same house that I showed them. Mhmm. Because they love the concept.

You know, they brought this to the architect to design it, not in the construction with the same house. But I gave him the vision of what can be done and the numbers. Now, of course, there's there's a margin of error. Like, if their subcontractors are more expensive, that's that's for them to negotiate. Ultimately, in my opinion, I always offer to build them as well because I'm like, well, it costs 800 to build.

I can build it for 800. You can do it cheaper.

Steve: Go ahead. But Oh, you're also offering your contracting services.

Maximilian: That's what I offer too. It has a little bit of a bonus. I would say not often people use it because most of the time the GCs are developers themselves, but when you offer it either when you partner with the GC, so some let's say somebody is a wholesale in Tampa, they partner with us, they find a deal, I give them the price, I give them the due diligence, they can go now to you and say, well, here's the numbers. This is based on Max. He can also build it for you.

These are real numbers. If these numbers work and you cannot make it work with another GC, well, at least he can guarantee that price.

Steve: Yeah. So you can't swing a hammer. How do you go from not being able to swing a hammer to knowing all this information, this confidence?

Maximilian: You learn by doing it. Mhmm. Right? Like like you said, we attended these city meetings. I know more about the zoning and Tampa to employ most architects.

I always go to the architect and, like, educate them on some things because I've read every single code of the areas that I'm working in. Right? I've been to these city meetings. I've talked to the city officials. I've talked to the mayors.

You'd be surprised how appreciated they are of just a developer asking, like, what do you guys want me to do? Mhmm. Where do you see Tampa, St. Pete in five years? What is it that we can do?

And they love it. They're like, well, here's the areas that we'd like to do. Here's the zoning we change. Here's some of the major developments that come in. Everything is public information.

There's no, like it's not

Steve: So they want to hear from you?

Maximilian: They do love that. Yes. Interesting. Yeah. And then, you know, once you kinda go down this rabbit hole, once everything's public, right, once a big hedge fund comes in to pull a permit, you can go in and pull the the data that they the permit and see exactly what they're building, where they are under the You

Steve: can see what they're getting approved.

Maximilian: Yeah. Yeah. So you can you study, and you get good at that portion. Right? Construction now, that knowledge is different.

You gotta build and learn. You know, now I've built houses. I've seen it all to a degree. So I've learned it now. But the first few ones, yeah, I was kind of at the mercy of the, initially, we hired GCs to build for us, then I realized I couldn't make enough money, because they were just They gotta get paid.

They gotta be paid, and they do not negotiate their prices. Yeah. Because, like I said, GC, you charge ten, twenty, 15%, whatever it is, on top of cost. So you're not gonna reduce your cost. That was a thing when we first started.

We had GCs working, and it was just like the numbers were slim. So, eventually, I went on-site. I was every single day talking to the subs. I wanted to learn what's happening. I was a student of my own work.

You talk to the subs. You understand the process. You talk to the superintendent, and eventually you ask the subcontractor, did you do that for less? They give you five more. They're like, Yeah.

I can do it for less. And then that was where I realized, okay, why don't I just go and negotiate with every single sub? We got a better price point and build my own construction company. And then we did. We just hired a GC, somebody with a license who is obviously the construction manager.

He has the experience, not me. He's the one overseeing the superintendents and the project managers that are on-site every single day. And they also have construction experience, obviously. So it goes down this path. But, yeah, we we started to build that, construction company now after we've seen it with other GCs and we've seen the things that we could do better at scale and just negotiate with our subs, you know, buy material directly from the source.

You're cutting the middlemans. You're cutting the margins. You can make it slim and make it profitable and effective.

Steve: So, again, three years ago, we met through collective genius.

Maximilian: Mhmm.

Steve: Right. And you're primarily wholesaling. Now that you've gone down this road and you wear a different hat, what are all the different companies you started to maximize this venture?

Maximilian: What do you mean?

Steve: You got a general contractor, a developer.

Maximilian: You raise a capital right now and a current Well, there's the the development firm and then a construction firm. They always go hand in hand.

Steve: So there's two different so what's the difference? And this might be completely ignorant. Different development firm and a

Maximilian: construction firm. The construction firm has a GC license. It has the employees. It has the warranties, insurances, everything needed. Because, like, at least in Florida and California, it's different than most other states.

You cannot just like, in Texas, anyone can build. Mhmm. Florida, because of the building code, there's you have to have a certain GC license. You gotta buy insurances. It's a process.

Mhmm. So there has to be a company that has everything in place. Mhmm. Because, like, if you build something and there's issues in two years, warranty claims. Right?

So there's that vehicle there. They wanna keep that separate from your development firm because the development firm know if that's having a 100,000,000 under construction. If one of those apples go sideways, takes everything down. So from a liability perspective, right, the developer, which is me, hires me as a GC. It's just two different companies.

I have a contract in place.

Steve: So one developer can have multiple contractor contracts with all the different they're they're all your contracting companies, but one development.

Maximilian: Well, it's one it's one construction company that acts as a GC. Mhmm. Then it's a development company that owns the single purpose entities that do the projects. So every project is in its own entity. Mhmm.

So but it's like that that way of development from single purpose entity contract to GC and then the fund coming from above funding cross down the path. Right? So that's really that's really the structure. Now we have, obviously, like, 60 of these entities. Right.

They all owned by the same holding company and by the same trust, but that's really it. So it's the development firm doesn't have any labor, and that's just me. The construction company has all the labor, all the overhead. The construction company also makes no profit. It's just it breaks even every year because the profit passes through to the development firm.

And so I really just cover my expenses there.

Steve: So is that cost? Yeah. Okay.

Maximilian: It's a cost. And then, we tried to go direction of building a sales team internally to sell. I realized, yeah, you save whatever two and a half, 3% commission, but selling these assets is a lot of work too. So we started to kinda slow that down and hiring, like, strategic realtors to list our properties that everyone is outsourced. And then we have the design component in in house, which goes more through my wife's design business.

Mhmm. Obviously, her design business is more like all out focus short term rentals, but she does a lot of the specifications, redesign. This is rinse and repeat. We're not trying to reinvent the wheel every single time. We design specifications that work for different price categories, and then we reuse them.

Might make some modifications depending on location, price point. But, conceptually, it's always, like, the same thing that works, that people appreciate. Mhmm. You get feedback from the things that we build, sell. We talk to the buyers afterwards.

What do you like? What do you don't like? What could we do better? And we've, like, we've really built this out this way. But in terms of, like, the construction site itself, we're outsourcing a lot.

We have the subcontractors. I don't have a shell company in house. We outsource all of this. We outsource the architects. We outsource the designers in house.

We outsource the sales. So we really just have a permanent division, a big finance division because there's way too many construction loans. So all the draws, bookkeeping is is a lot of work. And then we have the construction management side. So the construction manager plus superintendents.

Every five single family houses is one superintendent. If the project is, you know, sort of as big or as two super two project managers on-site for one single project and the everyday on-site. Right? That's really the core of it. Everything else, painters, you know, subcontractors, you you outsource that.

You have master agreements with them. Mhmm. Architects and whatnot, you have agreements with them. So you don't have that in house, so you can be fairly passive.

Steve: Mhmm. Was there also a capital firm or no?

Maximilian: No. We just we started to raise money on a per project basis.

Steve: I see.

Maximilian: There was every single project was a five or six b syndication because we did a lot of accredited non and non accredited investors. There was more on a per per project basis. And then now we're kind of transitioning them more into, like, a fund. Right? There's the money sitting here, and we diversify, and then there's various sales that feed into the the overall project.

But there's not a capital firm. It was just, like, initially, they're they're raising capital and then restructuring that more to a fund now internally so we can reuse it. We have a 96.4% retention rate of investors reinvesting. So that's where we work with them. We sell something.

We build a fund structure for them to reinvest and diversify it into various different assets versus just one house that you build and sell. Gotcha.

Steve: Okay. And then, is it Caitlin? Mhmm. She's very involved. You can't be here because she's doing more important things.

Right? Because last time it was once you guys were here. Yeah. But right now, she's got more important responsibilities at the moment. Yeah.

Right? But this is a two person company. This is not maxed at all this.

Maximilian: You know, when we we first came here three years ago, it was me and Katie. And because we were we started, it was just us. But we realized, like, Caitlin does not like a lot of the things in real estate. She doesn't like sales. She doesn't like the confrontation.

She doesn't like negotiations. She hates numbers. She's creative. She loves design. She loves working with people where she doesn't have to negotiate.

So employee based, subcontractor based. So it took us a while to understand of what is like the perfect path for us to work together. But initially, it became in, like, a fifty fifty. You know, you do 10 call calls out of 10 call calls. And there was a lot of, like, bumping because, like, she didn't like it.

I didn't like it. So right now, I would say we are more focused on what we love doing. So she's not too involved in, like, the construction fundraising and all this. This is really me. She's running her own thing.

She's running a design. She does the specs. And I stay away from this because I don't wanna be involved in designing it. Do you have her own no. Because if I design it, it ain't looking that good.

Just you you know, want me to sign to design it. So she does that. And then, of course, she's taking care of her baby, which is like the highest priority for us. She's like, she's a full time mom. She's stay stay at home mom.

And, just giving me the emotional support to to run the company. And, you know, I'm stressed out. I'm gonna bounce back ideas and go to her. She sees it from within, but still from outside to a degree because she's not in the day to day as much.

Steve: As part of that vision that you're selling the deals, is she involved in that that vision and, like, what it's gonna look like?

Maximilian: Yep. Yeah. So I basically designed a conceptual architectural layout, and then she designs the specifications, exterior, interior design. She's responsible for that. And then she's also kind of overseeing overseeing the sales aspect.

She's working with the realtors. She's creating the marketing, social media ads, and whatever we need to promote the for sale product.

Steve: The the softer touch.

Maximilian: Yes. To what Exactly. You do.

Steve: Yep. You're probably more brute force.

Maximilian: Yeah. I would say so.

Steve: Yeah. Got it. Okay. So, I mean, it's it's an incredible adventure. So, like, huge, huge transition.

So, like, I mean, what do you see now for the rest of 2026?

Maximilian: Well, 2026, really, is we're gonna finish that pipeline. We have a lot to chew. The the the the challenging thing this year is going to be within the active inventory, but also keep building the pipeline for '27, '28, '29. So we have to acquire more properties, start more permitting. So that is going to be really a challenge.

I think, you know, the goal is to double 250,000,000 by 2027. So but at '27, essentially, this entire portfolio is is done and sold. Then '27, we'd like to have 250,000,000 under construction.

Steve: This one's sold. Yeah. And then another 250. Yep. And, like, the margins on this, like, you know, these are big numbers.

I throw around these big numbers here.

Maximilian: Yep.

Steve: Right? But, like, if you do a 125, like, between, like, there's money you put into it on the properties. Mhmm. Right? There's the cost and everything else.

You gotta pay back the investors. Right? Like, what do you, like, typically clear on development?

Maximilian: On average, it's 20%.

Steve: 20%. Yeah. But the goal is to clear 20% on these developments.

Maximilian: Mhmm.

Steve: Is that, like, a hard and fast rule? Like, generally speaking, you begin development, like, you wanna shoot for 20%?

Maximilian: No. We really went by building the own GC company, we are able to do 20%. Beforehand, it was more like a five to 11%, if you're lucky. It's kinda at the mercy of their cost. Now we're cutting a lot of the expenses and reducing a lot of our costs.

So we're operating at a 20% margin. And, essentially, when we under ideals, we don't take it down if we cannot make at least 20%. Got it. And we always inflate our construction cost, and we always deflate our resale value. So we're always conservative.

Because oftentimes, as, you know, the the the decrease our values, these oftentimes sell for less because we sell preconstruction, like, nine months out of completion. Somebody comes in and say, hey. I'll give you $50,000 less, but I'm buying it today. I'll take it because at this point, I just finished a project for you. Mhmm.

Yeah. I made less. So we already factored it in because 95% of our homes we sell preconstruction. So we give them discounts. We factor this in, and then it's it's a lot easier project.

But we don't take them down if we don't have the conservative margin in there. And then this project like this one in Sarasota, but it goes the other way, and we're making 45, 50% margins on this. So that's really where where the sweet spot is at, 20% for single family, 25, 28% for Mhmm. Townhomes. And then, you know, 2 and a half, $3,000,000 and up of a house, you see a different margin because there's a little bit of economy of scale.

It's like a waterfront house for 4,000,000. You'll have 25 to 28% margins. It's similar to townhomes. Mhmm. So I guess across the board, 20% is very conservative.

Yeah. Because Sarasota is making up, like, 55,000,000 of that, and now it's 25,000,000 in profit already right there. So but we don't really you know, our underwriting is 20%, and this is what we assume. Everything will be happy, but this is kinda like what we plan on making next steps.

Steve: It's something we'll do with some other 20%. Yeah. Because, like, you know, our our flipper friends in in California Mhmm. In San Francisco where, you know, everything's over a million dollars. Like, I won't do a flip unless I can make a 100,000.

Yep. Right? So if it's not gonna clear me a 100,000 net Mhmm. Because I require that buffer, I don't even wanna look at it. Exactly.

That's kinda what you're saying. If I don't see a path to 20%, and that's 20% based off conservative assumptions

Maximilian: Mhmm.

Steve: I don't even wanna touch it. Yep. So if it's, like, 18%, there's no, like, ah, maybe we can make this work.

Maximilian: 818% is low, margin. Right? 18 to 20 is what we are. So, like, 16%, probably not. Yeah.

18% will do.

Steve: So something I've seen in the past, and this is just my own empirical data. I don't not done a lot of development that looked into development from my empirical data. What we see with developers is, like, they do really well. They do really well. They do really well, and they're always, putting it, they're always playing with house money.

They're not playing with house money. They're always, like, putting it in, putting it back in, putting it back in. Right? And they never really take their chips off the table. You know?

So, like, they always do really well, do really well, do really well, and downturn, and they lose everything. You know what I'm talking about? Yes. What are you doing to make sure that doesn't happen?

Maximilian: That's a good question. So we we there's a lot of money you make in construction. One thing is, also from a tax perspective, it's considered inventory. So you cannot just hand to an exchange. There's really nothing you can do to avoid your taxes other than taking your money off the you know, taking your chips off the table and buying existing assets, existing short term rentals, existing multifamily.

So that's what we do is essentially take big chunk of our money, put it back into existing cash flowing assets. The money sits there. We can do the 100% bonus depreciation and build a portfolio here where that income itself covers our basis. So if there's another slowdown and we don't build for two years, the cash flow from existing assets, rental assets in good locations, is gonna make us sustain. Mhmm.

That's really the main strategy that we do there. And then, of course, we underwrite it to a degree where there's always an exit of, like, we can keep it as a rental. Now what is what is our plan b? Some of the houses because when we build them at cost, we we only have to pay off the construction norms at 55, 60% of value. I can always refinance.

Someone make it work with a rental, to a degree. Once they get too expensive of a house, it doesn't work, so they have a little bit of a risk. But, really, the the thing is with construction, you put the really perfect nail to the to the head. You see, you have to plan almost, like, two years out. The underwrite today of what is going to be in two years.

And that's where we got lucky. Essentially, we had not a whole lot of inventory for sale last year.

Steve: Mhmm.

Maximilian: Because last year was one of those years was it was just slow. And I've seen other developers just reducing their price more over and over again, and nobody was buying it. As with politics, it was just a crazy environment. But, like, two years ago, you did not know, like, oh, yeah. The market is gonna be completely flat.

So you have that kind of playing the monopoly game, right, long term. What I like about it, where we are right now is the market is transitioning. We had this super high in at least in Florida. Values have gone through the roof, and then it kinda stabilized Mhmm. Few years.

And then it kinda dipped last year. It was super slow. Now market activity is coming back. So you could argue that probably '26 is a transitional year, '27 and beyond will probably be the next real estate cycle. So even at that four or five years, you have to plan it accordingly where you've probably two full cycles of construction where you can go more risky.

And then you got a plan of that downturn again. So you gotta make strategic moves of, am I gonna buy something? I'm gonna wait a little bit. So that's that's where you just have to really be a student to your market. Yeah.

Understanding your market, understanding what's happening, and then real estate is location driven. Location, location, location. Right? If you're buying the right location, you can always come back as a winner somewhere on the back end. One year, five years, however long it takes, but a good location values are going to somewhat come back to it.

Steve: Yeah. And then there's something along a way where you're saying that you're looking for more inventory. So do you take inventory from other people as well? Like, the other people bringing you deals? How does Yeah.

I mean How do you how do you make up for the shortage? Like, you can't find all the properties.

Maximilian: Yeah. Say I do most of the acquisition myself. Okay. Because, like you said, that's the one thing where you can break your business by buying something you shouldn't buy. Mhmm.

So everything I buy, I've thought about it for a long time. I've looked at it from 10 different perspectives. You know, when I first acquired Townhomes as an example, I've called every single listing and buyer's agent in the last three hundred sixty years that sold some sort of a competitor to me. I asked who bought it, why did they buy it, you know, what's the buyer's avatar, what did they like about it. Then some recent sales I even went to and knocked.

My, Hey, I saw you just moving it to two months ago. What do you think about it? You're going to talk on those? Yeah. And I get my research because like, when you try to as a developer going in, you're you're visionary, you're building something in the future.

Somebody needs to appreciate. So I have my personal taste of things I like, but I need to understand who's buying this area and why and who is, like, a demographic. Who is the buyer's avatar? So that's one thing I've always done is I really talk to the people, talk to realtors, I talk to buyers, I talk to the community, I talk to the neighbors, and this is how you learn of what type of product is really appreciated here. Mhmm.

Or, you know, there's a big difference if if it's a an area where the people with kids come in. They like to have their master bedroom on the same level than the kids' bathrooms bedrooms. Right? Because you don't wanna, like, go up and down the stairs if you have a newborn. But if it's more area with older folks, they like to have the master bedroom and the 2nd Floor and then all the guest bedrooms upstairs.

Mhmm. So those are the things if you design it wrong, it could be, like, cool house, but then you buy an avatar doesn't like it doesn't appreciate it.

Steve: You know,

Maximilian: do they like an elevator or not to do like a movie theater. There's certain things in certain areas we've seen. So really, going back to studying your market and being really proactive. So I'm extremely careful in our acquisitions. I do a lot of due diligence, and it's always a strategic play.

Understand what's happening. I know I pull permits nearby. I see who else has built the building. I see what type of product that they're building. So I can come in and compete by either being a better quality, a better layout, bigger, better view, whatever it might be.

Right? So you really have to understand because, like, when you just buy blindly and then two months later, you see, oh, these guys are building 13 units next door, and they're way cheaper than you and you just blew out. Right? So this it's really you gotta be careful with that. But you get the hang of it, and you get to kind of build a routine of, like, okay.

This is a thing I need to look for, and due diligence is key. Mhmm. The diligence in raising capital, those are the two things I do not outsource internally because my responsibility, if I fuck up, it wasn't me. But everything else you can outsource, and I always recommend people too because that was one of the things in our wholesale business And we tried to scale that. We brought people in the did the underwriting and the acquisitions, and we kinda took the executive side out of it.

Steve: Mhmm.

Maximilian: And all of a sudden, we had 70 properties on the contract, and it all overpriced. And it was just like obviously, there could have been a way to get it done better, hire better people, train them better. But we really learned there is, like, there's some things you just you need to stay in. Mhmm. And at least for me, I I love due diligence.

Like, there's one of those things. You just Excel sheets. You're building it all on paper, and the vision comes, you know, late at night. You're sitting there and you're doing it all. So that's that's what I appreciate, and that's what I do.

And that's probably the most important thing. Yeah.

Steve: But you also partner with people.

Maximilian: Mhmm.

Steve: How does that work?

Maximilian: So last year yeah, last year, January, we started essentially, like, a partnership program locally. The reason for that was kinda cash flow reasons. Right? Because you have the GC firm with a lot of labor. And if I'm only building for myself, I have to somehow pay them all the time.

And the goal is always to build as cost effective as possible, have a really low construction allowance. Like, whenever something happens, in worst case, we always just break even. And so keep your costs down. Now you have 40 people on on staff with the w two salaries. How are you gonna pay for all this all the time?

40? Yeah. So we ended up opening up the GC division to clients. We're building for clients to for cash flow reasons. Because you know how to build our prices are really good and competitive.

The cost plus 20. You can build some houses for people. We came in initially. You know, we got there was, like, 25 clients that reached out to us from just seeing our properties. We didn't even do marketing, so we ended up building for them.

But it's like when you build for them, you build a house, and then in twelve, eighteen months, they live in it, and they will not call us back to build another house, most likely. So that's when my idea came in. It's like, why don't I go and build, like, a partnership program to find real estate investors they wanna go into development? I teach them everything I do and help them to do five deals a year because I go to five people, five deals a year. That's 25 deals.

That's all I really need. Mhmm. It's rinse and repeat. And I have to go and, like, find another client and the whole custom, you know, the wife has one opinion that the husband has a different opinion. It's more developer.

They think like me because I told them how to think about the structure, and you rinse and repeat. So it's it's for them to make money. So the only thing really they do is they have to find their own private capital. It's the only thing or at least they have to find the leads. Mhmm.

I can help them close their private equity investors, but we do the acquisition, underwriting. We do the permitting process in house, the design, construction, construction management, sales, and even comment as a loan guarantor. Because in construction, you cannot guarantee a loan until you have done at least five single houses or five projects in the last eighteen months. But that's what we offer them is, like, we're we're fully committed to your success. I'm on the hook for it.

But I'm also building it also. Like, if something goes sideways, it was my fault. So I'm willing to take that step. And the developer is making money. We are making money.

Everyone is making money. And, ideally, the investors reinvest so they can build that portfolio like we do. And then we have a few of them that come in and and start scaling. And then it's like we already have a relationship to them. We already know them.

We can rinse and repeat and really build long term on the GC side at least. We can capture all expenses, so then it benefits me and my developments too.

Steve: Gotcha. One thing I want some last thoughts I wanna leave all the listeners with. Guys, if you got value today, please, again, please make sure you subscribe, comment, share this with someone that needs to hear this. I mean, I learned a lot today, about developing. What are some last thoughts I'd I'd like to leave all the listeners with in regards to, you know, your journey in the last few years?

Maximilian: Believe in yourself and be your future self. I think everything you know, I've gone through so many hardships too or because we grew quickly. We came out of college with no backgrounds. We did so many things wrong because how would you know how to train people? How would you know how to be a leader?

You don't notice in schools. We did so many things wrong. So really important is to be around like minded people and always find a mentor. There's always somebody doing it twice as good, four times as good, and just ask them to, like, for feedback, for dinner. You learn so much.

So your network is your net worth. But then also the one thing is we really what I learned is you need to really build out a plan of not just this month or a year, fifty years. Where do you wanna be in fifty years? Or do you wanna be in twenty, ten, five, one year? Really building out, taking all weekend.

We did that a few years back. Building everything out of where we wanna be. And then, basically, I'm writing myself, like, a story every year. In December so this this December, I wrote one of 2027, me writing back to my younger version of all the things I've accomplished. But it's written in present tense.

Every time I read it, it already happened. Mhmm. So you read this every single morning. The things are just it's just everything is gonna come in place. And it's really that's what I've learned over the last in sports initially, but now in real estate too, is when it's here.

That's all it really takes. It's like the visualization to believe in it. Because you start any real estate venture, you don't know how to get there. No. So you don't have all the people, all the things lined up.

It's scary. It's always scary. It's big numbers, it's risk. And you kind of just believe but the more you like, fade away from it being possible, the more you create negativity. So the more you stay on track of, like, mentally, and the more you also have that vision of where I need to be in the next year or five, ten years, the more you focus on that 20% that matters.

You know, wasting a lot of time on an 80%, you really just kneel down because every morning, you kind of set the standard of, I know what this is, what I'm gonna have to accomplish. And it it's crazy because we did that two years ago, and, like, everything on this list, we've accomplished. Yeah. We actually overperformed. You know, the dream cars, the dream house, the the scalability of of a company.

I put numbers in there were two years ago when we looked at this, I was like, I'm not gonna be a $100,000,000 construction. Like, holy moly. How are we gonna get there? And now it's like, we're looking for 250. And it was all we already lived that.

You know, the dream cars, we bought the Lambos and all the the fun things that was on the vision board, literally the exact color, that same spec. And it was in there, like, in 2027. I'm gonna drive this car, and I already have. Yeah. But it's it's it's energy, and I think that's really what the most important thing I can give back to anyone is it all starts within it's the energy.

Anything is possible as long as you can believe in it, and you will see that all things will kind of come and play. And god has his path or the universe has his path as long as you do you do good by yourself and you by your mindset, you will get there.

Steve: Yeah. Yeah. Someone wants to connect with you. What's the best way for them to connect with you?

Maximilian: Probably Instagram. Instagram is the easiest way. I'm trying to be more active. They'll be posting a lot. It's just max underscore volmer.

And, put me a DM, and I'm happy to help. Awesome. Thank you

Steve: so much.

Maximilian: Of course.

Steve: Appreciate it, Steve. Thanks for having me. Thank you guys for watching. We'll see you guys next time. Steve train.

Jump on the Steve train. Disrupt us.