Ep. 18 Keith Wasserman

Keith Wasserman, Founder, Gelt

Keith Wasserman, Founder, Gelt

About Keith Wasserman

Keith Wasserman founded Gelt, Inc. in 2008 during the height of the recession and financial meltdown. Keith has been involved in the acquisition of several commercial, industrial, and residential properties mainly in the Western US now totaling over $1 billion in assets.  As co-founder of Happy Home Communities in 2017, Keith added the manufactured home venue to the growing list of entrepreneurial ventures he’s involved in. He oversees the company’s operations, marketing, investor relations, acquisitions, leasing, development, and disposition services.

Keith graduated in 2007 from the University of Southern California from the Marshall School of Business. He is an avid golfer who belongs to El Caballero Country Club and is a big brother in the Jewish Big Brothers Big Sisters of Los Angeles. 

Keith not only leads Gelt’s charitable giving program but recently he and Damian Langere formed The Gelt Foundation, a 501(c)(3) public non-profit whose focus is on helping renters avoid eviction and stay in their apartments during an unexpected financial emergency.

 

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00:50 CR: So today I'm talking to Keith Wasserman. Keith is an entrepreneur in the real estate field, he's got an incredible story. A young millennial who is really making things happen, and I think you're really gonna enjoy our discussion.

01:08 CR: Welcome to The Real Market. I'm excited to have Keith Wasserman with me today. Keith is the Co-Founder and Chairman of Gelt Inc., and before I go too deep into what Gelt Inc. Is, I can assure you it's in real estate related, but what I'm really excited about having Keith on the phone is, it's nice when we have someone who has chosen real estate in which to be the entrepreneur, as the background for it. So Keith, welcome to the podcast, excited to have you.

01:35 Keith Wasserman: Yeah, thanks for having me, Chris. Really excited to be here.

01:38 CR: So why don't we tell the audience a little bit about what Gelt Inc. Is, and how it plays into all the entrepreneurial activities that you work on every day?

01:47 KW: Yeah, absolutely. So I'll give a little background of what Gelt is and the genesis. Let's backtrack to December of 2008. We were at the height of the last recession, and I just graduated from USC in 2007 and was looking to get into real estate. My family had been in real estate on the investment side, did some development. And I got my broker's license, I learned as much as I could about real estate, and then the market crashed. The stock market crashed, real estate prices started tumbling, and my cousin came to me with an opportunity to buy a single four-unit building in Bakersfield, California and being in LA, which is only an hour and a half or two hours south of Bakersfield, I didn't even know where Bakersfield was, it was like a different world. So I said, "What's this Bakersfield?", and he said, "Look, if the economy there is based on oil and agriculture, I believe it'll really come out nicely through the recession. The prices are down tremendously. I have this fourplex in contract for $150,000 that previously sold for $500,000. We could pick it up. Our monthly mortgage payment will be $600, and each unit rents for $695. So it's a real no brainer."

02:53 CR: Wow.

02:54 KW: So I said, "Okay. Let's look at this." So I drove up with him to Bakersfield, and I really got to learn about that market. It's the ninth largest city in California, 39th in the United States. It's got a thriving economy based on that oil and ag, and I took the plunge. We bought our first little building with an FHA loan, we only put 2.5% down. We got a cash advance of $10,000 on a credit card, we borrowed $5,000 from a friend. And that's what put us into business around nine years ago.

03:19 CR: That is being an entrepreneur. Now, did you have any understanding of what a bad boy carve-out was at that point that you were signing on to?

03:26 KW: Oh, man. To tell you the truth, my cousin didn't even know what escrow was. I learned a little bit just from reading and getting my broker's license, and really, this whole time we learned by doing. And I always recommend starting small. Your mistakes will be small and learn from them. So in the beginning days, we were young and naive, and did we make mistakes? I'm sure, yes, but we learned by doing. We were driving up to Bakersfield every week, we oversaw the rehab on these properties. And from the beginning we had good mentors that helped us. Damian's father being one, my father being one. And it's been a beautiful journey, all those 10 years.

04:05 CR: So how many times did you on that 99, stop at the In-N-Out at the end of the Grapevine?

04:11 KW: Oh, man. I hit that one, and then there's a Starbucks. The Starbucks there is like the busiest one, so definitely, I have ventured to these places many a time.

04:18 CR: Yeah, and you learn... I have a lot of roots in Fresno, and I've done that drive a lot. You learn that Friday's are the worst option to ever, ever try to come back home or go back up there.

04:34 KW: Exactly, try to do it mid-week. And also, I knew where all the speed traps were. I did get a ticket or two, and I learned where all the speed traps were, but looking back at my fondest memory is driving up to Bakersfield every week, and just learning the business by doing, cutting the checks to all the contractors, the vendors, leasing out the units ourself. And it was just a wonderful experience learning how to deal with buying the property, renting it out, fixing it up, just the whole process. And then eventually, we sold some of these.

05:05 CR: So you go from buying one fourplex, and it goes well. At what point did you go... When did you start to double and double? Was it a...

05:16 KW: Yeah. So December of '08 was the first fourplex, and then March of '09. So we closed our second fourplex, which I put the down payment, 25% down. My cousin got on the loan, because being self-employed, it was very tough to qualify for the loans, and so he got on the loan, Damian, and we bought that second one. Then we bought another one, a third one, a few months later. I believe my dad put the down payment, and Damian got on the loan. And then, the fourth one, my dad put the down payment, and Damian got on the loan. And so, we had four of these... They were all REOs. We had our pickings out in Bakersfield, and we bought those four and then we sold 49% of that LLC that owned all those to one investor, and we mostly based on all the ad value that we created on those properties, and we used that capital to buy another five or six fourplexes.

06:10 KW: So the first year, all of '09, we bought around 14 fourplexes and one triplex. And that was how we really cut our teeth. And then a full year later, December of '09, we closed on our first bigger deal, which is a 78-unit apartment community in Bakersfield. So, we raised 1.3 million from around eight individual investors. Between myself, my father, and Damian we rolled our whole acquisition fee back into the deal, didn't take a $1 out, and we were one of the bigger investors in the deal. And then we just went to family, friends, clients of my father's, family friends, and that's how we got the first deal done. And that was like one of the best deals, because of the time it...

06:49 CR: So around 2010 we're talking Bakersfield. You're talking Stewart Resnick, and you're talking the Boswell family, and you're talking Gelt, as the big land owner. Is that right?

07:00 KW: Yeah. Hey to tell you truth, we were the biggest buyer in Bakersfield. We bought 14 of those fourplexe's. We bought that 78-unit was the biggest deal to trade in a few years. So, yeah, things were... Great times to buy, looking back. And we then... The subsequent year, 2011, we bought a 128-unit in Bakersfield, a 70-unit, a 25-unit, and we did have around 350 units in Bakersfield, and we took what we learned there and applied it to another market where we saw blood on the street, which was Phoenix. So, if you rewind to around 2010-11, we entered that market.

07:34 KW: I remember my grandfather was, and grandparents, were living in Phoenix, and Damian and I were visiting them, and we wanted to learn the local market, so we stopped in on one of the brokers offices. It was dead, no one was there. No transactions were happening. And one of the brokers that came and talked to us, he said, "Look kids... " I was 24, Damian was 29... We were both in our 20s. He said, "Start with something small in the local market, and learn the market, and you'll build your track record." And I said, "Okay, okay." So what comes up next is this prime, prime, 415-unit on Camelback Drive, around 20th, by the Biltmore Hotel. And it was listed somewhere around I think... I think it was actually un-priced, and that happened to be our first buy in Phoenix.

08:20 KW: A huge property. We bought it from Enco, one of the biggest [08:25] in the nation. It's funny, because when we went to buy it... The first time it went around, it was pulled off the market. People were scared. It was all studios and one bedrooms, small, tiny units, but it was on ten acres of land in prime, prime location and it took us... That was the biggest raise at the time. We raised five and a half million dollars. We were under capitalized. You only put maybe 500,000 to a million in renovation, when it needed a lot more. And we sold it a few years later for a homerun price of $27 million. The next person that bought it, put five million dollars into it and it re-sold it for $43 million. So it's just the old adage. Buy and hold, and don't... Never sell, is pretty [09:05] interesting so.

09:06 CR: Well, let me ask you this. So you're raising money, it sounds... Originally from families, so you probably didn't have to put together any real significant offering memorandums or investment memos. But when you start getting into where you're raising five million dollars for a deal, I have to imagine that you're getting a little bit outside of just friends and family. And can you talk a little bit about that? When did you go from people that have known you forever and you can do it on a handshake, to now I'm raising capital with strangers and people I don't know, and I'm starting to manage money? When did that transition happen?

09:43 KW: Yeah, to tell you the truth, even from the beginning everything was well documented. We did have... My dad is an attorney, and he had his law firm draft all the documents. Everything was black and white, and we were very upfront and transparent. So we had signed agreements for everything. We did... We brought in my dad and one of the grey hair, another grey hair, we call them, someone with a lot of experience, to help us qualify for these loans, help us with their financial statement, and network to help bring in some of the early investors, and so I'd say the first deal with the eight investors were all friends and classmates. The second deal was more that...

10:25 KW: Eventually it started just snowballing from people we were meeting, and they started telling people, and it's all word of mouth. So we have almost 600 just individual investors, if you fast forward to today, and we've raised around 350 million of equity and it's exclusively syndication model. So we have investors in our deals as little as 100,000, even 50,000. Our stated minimum is 100, but if someone wanted to test this out, and felt more comfortable with 50, that's fine, and we have investors as large as million-plus in each deal. So the deal sizes have just gotten bigger and bigger. And it takes the same amount of time and energy, as you know also, to buy a large deal as opposed to a small one, and we could make a lot more money on the bigger ones. And it's usually a lot lesser competition. So the last few deals we've bought have all been north of $40, $50 million. They've been pretty large. And we...

11:18 CR: So you're starting to move out of the FHA loans and into, I don't wanna say more conventional, but are you starting to get out of that? Are you staying all within that so that you can sell to the government agencies...

11:33 KW: Yeah, all our loans are Fannie and Freddie, primarily. We have some British loans that are with some local banks, but I'd say 80 to 90 percent of the properties we do get these Fannie and Freddie loans, which are great in terms of max leverage, low interest rates. We get five years of IO, on these ten year fixed rate loans that we're getting. And so far, they've been the most competitive, so we've been using a few mortgage brokers like CBRE, and these still take these Fannie and Freddie loans, but those have been the best for us thus far.

12:07 CR: So describe for us now your portfolio as of July 2018? How big is it? What's it consist of?

12:13 KW: Yeah, so we've acquired a total of 8,600 apartment units and mobile home park sites, so I didn't bring that in. But we started a year and a half ago, as it's been tougher and tougher to find good apartment deals, we've ventured into a new asset class of mobile home parks, manufactured housing.

12:28 CR: I was gonna say, I thought... I think the term is usually manufactured housing if you're a developer, and if you are not a developer it's, "Oh, those mobile home parks."

12:36 KW: Yeah, exactly, exactly. Most of the viewers will probably know the term mobile home parks. Manufactured housing, it's a nicer term in what they are, but I call them mobile home parks, it doesn't matter. We've started buying those a year and a half ago. We brought in a top regional manager from Sun Communities, who was the second largest owner-operator in the country of that asset class, to really lead the charge and we've bought around 1,000 sites. So, I'd say we bought around 7,500 apartments and 1,000 mobile home park sites. We've sold around, probably 2,500, give or take, apartments. We're sitting at 5,000, give or take, apartments, and at 1,000 mobile home park sites.

13:13 KW: And the biggest markets for us right now are Denver, we have around 1,500 units. Salt Lake City, we have 1,000 units. Reno, we have around 500-plus units. We're in Seattle, we're in Southern California, Portland, we're all over the Western United States. We are breaking into Texas now. We're going to be closing July 25th here in 2018, very soon, on a 588-unit, two-property portfolio in San Antonio, Texas. So, we are making our way into the great state of Texas. And some of the mobile home parks, though, are on the East Coast. We have Pennsylvania and Alabama, but for the most part, we used to be just Colorado and west but now we're searching for a little more yield, and we'd like San Antonio to be our first Texas market.

13:53 CR: And so in these western markets are there characteristics about them that jump out to you as you look at your investments that you really like that would make it different than say, the East Coast or the Southeast?

14:05 KW: Yeah, to be honest, ease to get to. Within an hour or two-hour flight was our best option when we were a small group. We are starting to get bigger and contemplating opening another office elsewhere, but for now... And plus the job fundamentals in these markets, the population growth, we're looking at more markets with higher barriers to entry. Phoenix, we bought around 2,000 units, we've sold them all to create a track record and just to try to tie in the market a little bit. But then, at the end of the day, everything we bought in Phoenix we bought so right that I'm sure we could withstand even the next recession, etcetera, and we probably should have held it. Anything we've sold has gone up tremendously more in value.

14:46 KW: But, we sold to create that track record and really put some money back into our investor's pockets with those huge returns, and then they sold their friends and family and whatnot. But the goal right now is to build a large portfolio and sell just occasionally, so we're looking for buildings in areas that are, I say, A and B areas in the markets that we're in, which are the markets I mentioned.

15:10 CR: You've got a rather large portfolio right now. It started with you and your cousin, the two of you. How big's your team today?

15:16 KW: Yeah. We have around 19 individuals here in the office. We don't do any property management, which I like, it keeps us nimble and small, and we oversee the property management company. So we have a acquisitions team with a director of acquisitions, a COO above them, a few acquisitions people under them. Asset management director and a couple under them. We have accounting team, a CFO, etcetera. So we're around 19 up here in Tarzana, and the San Fernando Valley is where our office is, and otherwise, we'd have 200-plus employees if we did all the property management. And it's a tough business, you have a lot of training, hiring, firing, just dealing with people. That's where usually a lot of the problems occur. I'd rather oversee them, really, and make them our partner.

16:07 KW: We've done deals where they've reduced their management fee, and we've given them a piece of the back-end to really align our interests and put their best people in our buildings. But we are very hands-on. We have weekly conference calls with the management companies. We oversee all the major CAPEX projects, set the business plan, make sure they're hitting their numbers, etcetera. So we are very involved, but it enables us to stay pretty small and nimble.

16:31 CR: So the interesting thing is, and I definitely understand not doing property management, we do it because in the office projects that we're in we think it's important. But by not doing it, that means that you are working with a variety of different companies around the country who probably use different platforms. How do you deal with the issues of technology integration? And how do you use technology in order to keep your company, Gelt's, overall headcount lower? These always evolve into a very interesting conversations, and I obviously have a sense of what you do, but maybe describe this a little bit.

17:09 KW: Yeah, for sure, for sure. So, being younger, we're pretty tech-savvy. One of the original management companies that we were... When we bought that building in Bakersfield, they mandated that we keep the management company, etcetera. So they were all paper and pen and we were just floored. We helped them get involved with one of the property management software solutions. It was, I think, AppFolio at the time for them, and brought them all online so we could really track what was going on better, and it just made their jobs a lot easier, and they loved it for us. It was a tough transition, but overall really good for them.

17:43 KW: So there is a ton of property management software. We don't use it directly in our office, but the property management companies use it. We did start a separate company, actually, called Domuso, which is a full financial services business for just the paying of these rents. So our clients are companies like ours, ownership groups, owner managers, management companies and we handle all payments on properties. We're the first mover to provide point-of-sale financing. So we'll finance any payment due to landlord on improved credit. Just really a lot of innovative things. We've eliminated cashier's checks and money orders completely. We're going paperless. It's making the management companies job a lot easier. We have Domuso certified funds. You could pay now, rent with cash at any Money Gram location. Really innovative stuff. And we're displacing all kinds of legacy payment solutions very rapidly. So we're our own client on that one. I'm a co-founder, not involved in the day-to-day but really excited about that business and Damien, my cousin, who founded the Gelt with me, who ran this company with me for many years, now runs that company and just checks in once a week for Gelt. But, I really run the real estate, he's running the technology companies and then in office, what other things? We use Slack religiously to talk to each other. I think that's a good way to communications, it'll cut down on some of this email back and forth.

19:12 CR: So you're saying that you use Slack internally to communicate as a team. Is there anything else that you use along with Slack?

19:21 KW: Yeah. We're religious on Slack to communicate, to cut down that email. We have CoStar, obviously... The 800-pound gorilla... We utilize all their data and we're consistently looking at new technologies. We actually have our own venture arm, we founded. We raised around $4 million bucks from our current investors and have invested in 20 early stage technology companies, some being in the real estate tech world. But the thing is, I was always investing on the side and I was an angel. And I wanted to provide that opportunity to our large investor base to have those alternative asset class. I think it's phenomenal to have access like that. And we have a professional running that on the day-to-day named Jake Chapman up in the Bay Area, and I pretty much helped raise the money, and it's nice to be able to diversify personally and to help our investors. So, yeah.

20:12 CR: So from your seat, when you're looking at technologies that relates to apartment buildings, you really have hit on some interesting pressure points when it comes to the apartment experience. And then I wanna jump back to how you run your company. But from the renter experience, if someone comes to one of your apartments, have you been able to solve the... I mean, the number one issue people have is the amount of cash it takes to move into a new apartment. There's usually some sort of a first, second month's rent. There's usually some sort of deposit on the back end and then there's moving cost. Is there anything that you're doing that we're starting to see some of the really big ones do or maybe you do it differently with technology?

20:57 KW: Yeah, so, the company Domuso, we will follow up and handle any payment due to the landlord, and usually that first move-in payment is the biggest. You have all those things that you mentioned. So, around 50% to 60% of the applicants qualify for the financing. It's sort of like credit card rates. They're term loans of up to 12 months. They have to pay that off. And that's really helped. It's been a win-win for the resident, obviously, and for the landlord to attract residents and to... Actually, keeping that cash in their account makes them less of a risk as a resident. So that's our company Domuso that we're doing. We have a lot of really cool things that we're gonna be rolling out in the future, like lines of credit for renters and just... Our goal really is to make rent flexible. The rent, any large payment in life, the house payment, the car payment, has flexibility. You could move your due date, you could have flexibility. Rent, due on the 1st, three day, by the third, they start the process for eviction. It's very rigid, it's very archaic and the goal there is to make rent flexible and just change the paradigm and really empower the renters.

22:14 CR: And I think that's terrific and I think it's an area where I agree with you. The demands are out there amongst people saying, "Why do you get to tell me? I know I need to pay on a 30-day cycle but why do you tell me it's the 1st if my pay day is the 8th and the 21st or something?" So let me ask you this... When you get into the apartments, are you doing things with technology, whether it's wireless keys or Nest within... Is there technology that you're putting from the front door into the apartment that is appealing to a technologically savvy tenant?

22:51 KW: We are, on some of the newer buildings that we're starting to do some ground-up development. We are doing that on those. But the costs are pretty prohibitive. Our buildings are pretty much... I call them C and D buildings, older assets, and the cost to install those and put those all in, we just wouldn't get the ROI. Plus, a lot of this technology that we're worried is gonna be pretty antiquated and it's just gonna be... The biggest bang for the buck when we go and buy our buildings, we always add, if it doesn't have a gym, we're gonna go add a gym immediately, that's the first step. Second, is we always allow pets and encourage pets. We put in pet parks. It's great. It's around... We're charging $25 per pet per month. It's a lot of extra income. There was one building we were looking at, didn't have a lot of pets, was over 500 units. By not allowing pets, the building was worth a million to a million and a half less if you capitalize that lost income. So, I just don't understand. And usually the residents with pets make good tenants and they stay longer. So, we build up the dog parks, make them really class A facilities. We've added bike rooms, so the bikes aren't strewn all over the properties, and that's another income generator. We charge $10 to $15 per month just for bike storage and just take care of the property.

24:05 CR: How about on broadband, because I know five or 10 years ago every renter wanted to be able to have DirectTV and it was all about how do you do that on the roof? And then now today, what we continue to see is, that we don't really care about the satellite dish but what we really care about is fast WiFi so that we can watch and download anything we want. So how do you deal with that?

24:30 KW: Yeah. We try to get the best providers and we have free WiFi in a lot of the common areas. And totally I think that's another big amenity for apartments and you gotta try to get the best for the fastest download speeds, etcetera. People are really core cutting nowadays and you see in the stocks that some of these companies compare to some of the Netflix's and Amazon's of the world. But definitely that's gonna...

24:56 CR: Do you keep your broadband and other utilities as a separate payment for your tenants or do they write one check that covers everything?

25:05 KW: It's one check. So there's a third-party billing system. I think it's including with their [25:09] __ we bill back for water, trash or I believe it's all one check. But it's a third-party that handles it, so.

25:18 CR: Interesting. So moving back over to your company and talking about young professionals who put this together about 10 years ago and it's growing and it's across the western US, I understand Slack. I personally am not a big fan of Slack 'cause I think it can be a lot of noise, but I see why people like it. Do you use anything else like a project management system? How do you allocate tasks internally? Is there anything in terms of mobile-based software that you use just to run your company on a day-to-day basis?

25:55 KW: I think the asset managers have some project management, 'cause they oversee all the major capex projects and I'm not sure which one they're using, but they do use something I know to communicate with each other. We're in the process of actually hiring also a project manager. Our asset managers were handling a lot of the project management and we're big enough now where we need a full-time project manager to oversee all these major capex projects and, yeah, I think, I'm trying to think of any other cool technology.

26:28 CR: How do you all communicate with your investors? Do you use a portal or anything like that?

26:32 KW: Oh, yeah, so we just started using IMS as a really cool platform that... There's a few competitors but IMS we like the best. And every quarter we have Direct ACS, we got off of writing paper checks and my hand is saying it's very thankful because I was signing a 1000-plus checks every quarter. But we have reports that are issued, they could just log on to the portal, see their quarterly financial report for the each property they're involved in, get their K1s, any communications from us. So everything's through the portal and I think a lot of investors like that. They could just check that at their own time and we're trying to get off just the email correspondence so.

27:15 CR: That's terrific. So as we look at everything you've done, one of the things I always get a little concerned about for our listeners is, you are a tremendous success story. Someone who started right out of school with strong education, went out there, risked it, and you've built a great company. But sometimes when we start to tell these stories, we only wanna talk and be honest about the good things and then sometimes wanna gloss over our mistakes. Can you talk a little bit about some of the lessons you've learned? 'Cause I know it hasn't been one of these hockey sticks straight up. I know that there's ups and downs. Are there some lessons or some stories you can share with us about things you've learned the hard way?

27:55 KW: Yeah, totally. So I'd say with our investors, we consider our golden geese. Without investors we wouldn't have the golden eggs and the properties and the track record. So we treat our investors extremely well. On one of the fourplexes we sold at a loss, the investor, we gave him out of our pocket, I think it was around $30,000-$40,000, and just gave him back that part of the loss of his investment to make him whole. So now we could still say, we can keep intact that we've never lost any money for any of our investors. So I'd say, that's an important thing that we did in lesson. I'd say partner...

28:33 CR: When you look back at that investment, what did you learn about the investment that you wouldn't do again?

28:39 KW: I'd say just because something's cheap doesn't mean it's good.

28:44 CR: That is a very good point. I'm gonna put that into my list of quotes.

28:48 CR: 'Cause, that is, especially when we're talking about investing at this point in the cycle where everyone's like, "Well, everything's seems so over-valued." "Well, just because it's cheap doesn't mean it's a good investment." I think that's a great line.

29:00 KW: There's a reason it's cheap, right. We were buying these fourplexes and they look great on paper, but that's if you keep 'em occupied and there's not too much turnover. And we had trouble leasing up some of these fourplexes. They were in the roughest parts of town, they were in Bakersfield which was a good market but we started buying... The bigger buildings were all in much better areas so I'd say we were dealing with a lot of Section 8 tenants and just, it was, they were really rough units, there was a lot of high repair and maintenance, high vacancy, it was just... There's a lot of ways to make money, there's easier ways, harder ways and it just wasn't for us. So we started buying in better locations so...

29:35 CR: So that goes into a column of, for your acquisitions that said, "We're not gonna make this mistake again. I don't care if you tell me it costs this much to get in," because a pro forma is exactly that. A pro forma, right, so.

29:49 KW: Exactly, so we're only looking, the area's the most important. You can change the building, the look, but you can't change the area. So, I'd say, we gotta be in a good area where there's good demographics, good job growth, people wanna live. So that was an important lesson. Another important lesson we've learned along the way is choose your partners wisely. We learned a great deal from some of the earlier partners that we had, but just difference of opinions, we didn't see eye to eye, a lot of just conflicts and stuff, and some partners of ours in the beginning have moved on in separate ways and we wish them well, but it's just I'd say choose your partners very wisely, just like you would choose your spouse. You date for a while, you don't just jump into bed and get married the next day. So I'd say partnership is very important.

30:35 KW: And anyone you work with, your staff, I think we're blessed that we have a lot of people every week contact me that wanna work here, and I get to interview and even if we're not hiring at the moment, I still like to meet the people because you never know when we'll need someone, or we've created positions for people if we really like someone. And another thing we've learned is, we started everyone at very low initial salaries, but with the promise that if they stay here and do well, they could make a lot more than their peers, which has happened for the people that have been here four or five years, their salaries are higher.

31:13 KW: Everyone in the company I share in the promote, with from the lowest pay to the highest paid in different levels, but everyone I consider my partner and we're all on the same page to make this company successful, and work hard, and I think everyone really appreciates that. In the beginning, for people that are hungry and wanna prove themselves and are quick and easy to learn and take just the job very seriously, but have fun at the same time. It's enjoyable what we're doing. There's always issues, we've had floods, we've had fires, we've had hailstorms, just things, we've had shootings, just when you have so many people in the general public under your roof, you're gonna have stuff happening, but always just come to work and try to progress, move the ball down the field, and make progress and just be happy with the job every day and keep... We have a good culture. It's like a family culture here. It's pretty cool.

32:09 CR: Well, I certainly understand that. Let me ask you, 'cause I find it interesting, you do run a syndication business, which means you have lots of investors, and communication with the investors is key, I know, and it's a key thing for what we do in our business. Have you learned any lessons the hard way about how much to communicate, how little to communicate? And I'll prep it with... I've learned the hard way that I started with the idea that my investors wanna know everything all the time, and when I came up to speed, we wanna... It took one of our investors pulling me aside saying, "Chris, I'm invested with you, but I'm not emotionally invested, and I don't wanna know about everything that could go wrong or might have gone wrong." So we have evolved and we try to share as much as possible, we also try to only share things that we feel confident about happening. Have you had any of those kind of experiences?

33:05 KW: Yeah, I think... I agree with you on that one. I've always been a big believer of being transparent and open and honest. But at the same time, they don't need to know every single little thing. They trust us to do what we do best, which is buy and manage and run and eventually sometimes dispose of these buildings, and all our investors are either professionals or retired, and they're passive is what I'm saying, and as long as we're being honest and not hiding anything and just being open, I think... But like you said, every little thing they don't need to hear about, it'll just make them worry and stuff. And then at the same time, it's funny, I think what we've seen over the years is, sometimes a lot of the smallest investors are the ones that worry the most and cause the most aggravation and stuff, so it's interesting. My dad says the same thing, he owns a shopping center here. He said, "Any of the tenants that have come in and they bring in the lawyers to review, to chop up the lease, and they fight every single little thing, they usually don't make it."

34:08 KW: This is not the businesses that make it. The ones that just go over the big part, how much the rent is, the important parts, how long the lease is, they're usually the more successful tenants. So I think I've learned that with dealing with investors. And in the beginning, we spent a lot of money, we used to charter planes up to nine people to bring the investors to the properties, and it did cost more than doing commercial. But if you brought a group like we did, it was so much easier and it left a good impression. We really catered to them. We can go to the property, do these day trips, we've done probably 20, 30 of them. We haven't done it in a few years just because we're at a point where the investors totally trust us, but real estate's great, you could see it, you could tell a story about it, you can walk it, feel it, and that's good.

34:57 CR: Speaking of that, in your communication with your investors, do you for a potential investment when you're trying to syndicate the equity, do you put together videos? Do you do anything in that regard to make the investment look exciting?

35:12 KW: Yeah, we just started about a year ago having a gentleman, a young gentleman go to the property and shoot some drone footage. These buildings are great when you have the drone footage to go over the whole asset. And these are usually spread out and large and they make a good two-minute video, three-minute video that we include with the offering... No, people are visual. And I say, a few people... We do still do the whole full offering memorandum, very few people review every single page of in stuff, and we're at a point where people just trust us and know our track record and invest with us, but we still, in principle, and for us personally to do, we create a full offering memorandum for each property and stuff.

35:53 CR: That's terrific. So we've talked a lot about your business and how you grew it and where it is today. What I was excited, I wanted to make sure everyone knew, that you and I have developed a relationship over the last few years, but it started on Twitter. You reached out to me on Twitter, which I appreciate, and we've gotten to know each other since then. So talk a little bit about how you use social media. You're very active and we often like or retweet some of the same things. So talk a little bit about that.

36:23 KW: Yeah, so I have been on Twitter for many years now and I didn't know what it was and my cousin said, "You should try this thing, Twitter," and I got hooked when I started. And some of the best relationships have occurred on Twitter. One of our early venture capital investors in that company, Domuso, I met in a relationship via Twitter and that same gentleman now runs our VC fund. So I've met and communicated with a lot of amazing people via Twitter, it's just great. You could see how people think. I get all my news from Twitter. I wish there was more real estate guys on Twitter, there's a lot of tech people, but there needs to be more real estate. You know you had Carl Muhlstein on the show here, who I love. I've met Carl once but I love following him on Twitter because he brings to attention all these different issues that are material for our business in the real estate space. And I love seeing what he's tweeting and what you're tweeting. It's just nice. And then social media, I'm a big proponent of these, I feel like it's our personal brand and I'm always wanting to be top of mind, for everyone that, if it's brokers, if it's investors, if it's... You never know. So I'm a big proponent of sharing what we're up to here at Gelton and even personally, if my family just... I don't know, just I'm a big social media proponent. I'm always on Instagram, Facebook, LinkedIn and Twitter. Those are the ones I'm active on.

37:50 CR: Speaking of you and your family, one of the things I've been following is your move from the Valley out to Santa Monica and your family moving to a different stage in life. Tell us a little bit about your personal life.

38:03 KW: Yeah, so I grew up in the San Fernando Valley in Woodland Hills. I went to Milken Community High School, a Jewish school off the 405 freeway. My whole life I've lived in the Valley, I then moved to Sherman Oaks for the last eight years and my cousin and business partner jumped over the hill and moved to Santa Monica and said his life has changed. So I said, "What is this 'life has changed' thing?" So I went out there and I just fell in love with it. I love being able to walk to all the different local places, businesses and... I moved to 23rd and Montana is where I currently live and it's just a great neighborhood and yeah, I love it. It's nice because it's a reverse commute also up to the Valley. So we're gonna keep our office here for the foreseeable future, in the Valley. A lot of them, the people that work here it's an easier commute for them and it's still pretty easy for me. It is much more expensive, the west side, but the quality of life, I just love it out there. Obviously, the temperature is 20 degrees cooler, you know. But it was 118 in the Valley here at the office and I went back over the hill it was like, it's still high, it was in the 90s, but it wasn't hell, I'd say, like...

39:08 CR: Having lived for many years on 4th and San Vicente and Barrington and Montana I agree with you. We were destined to stay on the west side, until my wife came back and said we were having twins and then, all of a sudden, I said, "Wow, you get a lot more for your money in Pasadena." So we braved this 112, 118 degree heat recently. But one thing, I don't wanna let this podcast go by without mentioning your wife and can you talk a little bit about her, and she's an entrepreneur as well and 'cause you guys really are the millennial story of two people who are just really entrepreneurial and coming up with ideas and making things happen.

39:50 KW: Yeah, totally. So my wife and my father, I'd say, and Damien are sort of like my role models, and my wife is unbelievable. I met her, she was a commercial broker for many years doing tenant rep with Cushman & Wakefield... I'm sorry, not Cushman & Wakefield, Charles Dunn, she was with Robin Ellis and Colliers, a few different firms. But I met her through work, she cold-called my Dad, had this office building for lease here in the Valley which we're in, and she asked if she could see the building. And my dad started talking about me and trying to be a nice Jewish guy and set me up. He asked me go open the space and I saw this beautiful girl, 23 years old at the time, I was 24, come up and I said, "Are you with the broker?" She says, "I am the broker." So it's not common that you see a young female broker in the business, in the office business, commercial brokerage.

40:40 KW: So we became friends, I chased her for nine months, and finally started dating and the rest is history. But my wife, I push her and she pushes me, which is amazing, and she finally started doing some more creative things, she's very smart and creative. And she started flipping homes in the West Toluca Lake area and then started building from the ground up homes, and then she just kept graduating faster and faster to new things. She started building apartment buildings. She's almost complete with a nine unit in East Hollywood, a 21 unit in Highland Park, she did a major renovation on a 60 unit in Highland Park, she bought a 93 unit in Pasadena on the Los Robles and the 210, she's just bought a 89 unit development site in East Hollywood Los Feliz area by the children's hospital. Very active.

41:35 KW: We partnered together, so she runs her own firm, it's a sister company and that way, I just don't want to be partners with her in the sense that, I just feel... I like that we have a little separation. She's still in our building, but has her own suite and she utilizes a lot of our resources, but she runs her own deals, makes her own decisions and has some of our investors but a lot of her own investors also. And we've done some joint ventures like the Highland Park building. We bought an RV park, actually, in Monterey, recently. It has an... It was 63 sites with 23 sites next door that were... That needed to be entitled. And so she's going through the whole... She has an expertise dealing with the cities and getting that entitled and she's much more creative and seeing a vision for that site. Yeah, it's pretty amazing being in a entrepreneurial kind of family. And we have a two-and-a-half year old daughter, who we've brought to the job sites, and just really try to get her involved in what we're doing at a young age and see what we're doing. So it's pretty cool.

42:40 CR: Well, that's terrific. One of the things that I'm pushing hard, is trying to get more and more women who are in real estate to come and speak on that. So I think I'm gonna be reaching out to your wife sometime soon, to have her on the podcast as well, because it's amazing how the business, which has traditionally been a male-dominated business, the women who are doing amazing things, I think have just been more discreet and it's my goal to get more and more women to talk about all the things that they're doing. So this has really been a terrific conversation. I'm pleased we got to make it happen. I love to tell people that you really can develop strong networking and relationships via Twitter and other social mediums in it. And it's great to see all your success. So, Keith, I really appreciate it. Appreciate you being on.

43:32 KW: Yeah. Thanks. Thanks so much for having me on, Chris. I really appreciate it. If anyone wants to ever get ahold of me, I'd say email is the best. You could just email me, keith@geltinc.com. And that's Keith at G like good, E like elephant, L like Larry, T like Tom, INC, dot com. And I'm happy to answer any questions, if anyone has.

43:49 CR: That's terrific. Can you also give us your Twitters? I always like to add that at the postscript. But if you're... You wanna...

43:54 KW: Yeah. It's Keith, my name Keith and then underscore, Wasserman. So you just look up Keith. Just look up my name in Twitter, Keith Wasserman, and you'll see me, I'm very active there.

44:03 CR: That's terrific. Well, thank you so much, and I look forward to seeing you soon.

44:07 KW: Alright. Sounds good. Thank you so much, Chris.

44:07 CR: Thanks. Well, thanks, Keith. That was a wonderful conversation. We didn't get your wife's first name, Galena, out there. But Galena Wasserman certainly is someone I wanna have on the podcast in the future, but this was a terrific conversation. Keith gave us his Twitter, which is Keith_Wasserman. And as he said, the best way to get ahold of him, if anyone's interested, is keith@gelt.com. And for our show, we would really appreciate it if you gave us a review. Go to Apple, any of the podcasting platforms, and subscribe and leave a review, we'd really like it. You can also go to our website, chrisrising.com and subscribe, and please follow us on Twitter @chrisrising. Thanks so much.

Kenzie Gallagher