Rocky

Welcome to another episode of Kiss My Assets. I am Rocky Petersen, vice president of communications at Neighborhood Ventures. I'm sitting here with Jamison Manwaring, cofounder, and CEO at Neighborhood Ventures. Hi, Jamison.

Jamison

Hi.

Rocky

And also, John Kobierowski, who is president of real estate and cofounder of Neighborhood Ventures.

John

Afternoon.

Rocky

And the reason that I love seeing cofounders when they're sitting right here is because they really did found this together. It is an absolute combination of the two of them and their levels of expertise in their backgrounds. And since we are coming up on Neighborhood Ventures fourth anniversary, we wanted to kind of take a step back and

Rocky

look at what brought them together. I think our listeners will find it really interesting because it does continue to play a strong role in not only our company culture, but also how we find deals, how we renovate and sort of the our overall thesis as a company.

Rocky

So Jamison and John feel free to jump in. Neither of you are very shy.

Jamison

Well, yeah, and I I don't know if John will remember the details because he was doing a lot more at the time than I was. But I just want to tell the story a little bit about how we met because it's kind of a fun story.

Jamison

I was working at LifeLock Vice President of Investor Relations, and we were getting acquired and I had been thinking about how do we open up commercial real estate to a broader pool of investors coming from Wall Street, where people can invest in stocks, bonds, they can be good investments and they can also be bad investments, and a

Jamison

lot of people aren't comfortable with it. And I had done a ten unit building on my own when I was living in New York. That was Idaho near my hometown and really loved getting back into real estate after being working on the market for so long in the stock market.

Jamison

And when LifeLock got acquired, I had the opportunity to say, OK, well, what are we going to do next? And really felt like if there was a way to open up real estate investing to the general public, to a broader market that there would be a big opportunity there because I think a lot of folks, when they

Jamison

think of real estate, they say I'd love to have some real estate, but I don't want to be a landlord. I don't have time to change toilets on a Saturday afternoon, but they would love the opportunity to invest in good real estate projects.

Jamison

And historically that had been limited to few high net worth individuals who own all the real estate and crowdfunding laws have been passed that allowed you to raise funds for projects like this online. And so some things have kind of come together for me in my mind, and John was also in his own sphere, having some lightbulbs go off about how crowdfunding could fit into this. But I had started looking at buildings to buy in the Phenix area to potentially purchase and do a crowdfund raise on it. And I was a novice. You know, looking back, I'd only own one little ten unit building and I had started building a platform and a website

Jamison

around crowdfunding. I was a few weeks away from launching that website, and I was looking at a building. It's actually on seventh Street, down by Thomas. You may remember the building. It was a listing of one of your brokers here.

Jamison

Right now, there's a Thai restaurant in there. I went and looked at it as a potential building to do crowdfunding on, and I told the broker that I was interested in what I was doing. And he said all my boss talks about crowdfunding all the time.

Jamison

And I said, Well, that's interesting. And I said, Well, what's your boss's name? He said, John Kobierowski, I just jotted it down. And I was a few weeks away from launching. I went home. I researched John and immediately saw his name all over.

Jamison

A lot of stuff right in the Phenix market commercial real estate market. And I'm like, Wow, this is an interesting guy. He's interested in crowdfunding. He's not your typical what I think of a broker who's just trying to sell deals all the time, which is more of an innovator.

Jamison

Although I hadn't met him the day that I launched the website, I sent John an email and said, Hey, I heard you're interested in crowdfunding. This is what I'm thinking of doing. And John, sometimes good at email, but sometimes he has a lot of email.

Jamison

And now looking back on it, he replied in like ten minutes and said, Well, let's me. Yeah. We ended up going a meeting, had a, you know, half hour meeting that turned into probably three hours and just started talking about how could we build a company?

Jamison

That's the story I remember.

Rocky

So I kind of love at first sight.

Speaker

That is.

John

Very factual. Yeah, the whole idea was I always felt that people use the word inclusion inclusionary so much more often nowadays. But real estate investing, investing in even IPOs, all of these things out there are not very inclusionary.

John

You can't get involved unless you know the right people or understand how the rules are done. So I never like that in this business where somebody couldn't invest in a project because they didn't have the right net worth, I thought that's actually the worst right to be experience, which Representative Schweickart was able to push through and other

John

crowdfunding laws the last couple of years. It could be just the general that they lived in the area mean they should be involved people involved in their neighborhoods. So, yeah, give us that. I met, we talked about it.

John

We kind of went through a lot of the things I recognized, the things that I wasn't strong in operational stuff or even having the bandwidth because of running API and some other things. I was diverse that he could be very good at that and we hit it off right away and we figured out how it worked.

John

Building I had my corner was I had the right name for the company.

Jamison

Yeah, you did. That's right.

John

Neighborhood Dot Ventures already secured and he was like.

Rocky

I didn't know that.

John

He's like you in.

Jamison

My company was your called village shares.

Rocky

Oh, I like.

Jamison

Shares like owning shares of stock. Sure. And I heard his name and I like, I love that. Forget my name. We're all yours.

Rocky

It's graduate.

Jamison

And but you were visionary because you had got that several years before that domain name.

Rocky

I didn't know that.

Jamison

He was going on the same, the same circuit. Here we were. We were thinking of the same things. And, you know, kind of looking back, if we had never actually met, you know, who knows. But somehow the way this whole world.

Rocky

Works, stars aligned.

Jamison

I was out kind of hustling. He's all he's talking about his ideas, and we ended up meeting in a large city like Phenix and and we ended up being really, well, complementary partners because I realize now having, you know, ten projects in that I was a complete novice.

Jamison

I was lucky I didn't buy that building at the time when I looked at it. Right. You can kind of muddle your way through on buildings, I think, to start out, but to do really do it right. And especially if you have investors, you need deep expertise.

Jamison

That's why it's worked out so well.

Rocky

We're pleased to announce our latest project, Venture and Country Club, is our first project open to investors nationwide, which means that your friends and family can now invest in Neighborhood Ventures projects. It's very simple go to small change eco, create an account, start investing and enjoy the benefits of Arizona's booming real estate market.

Rocky

So fast forward just a little bit, and you've now formed this company. You found your first project. Can you tell me a little bit about that first fundraise? Because we've had a few investors not only on this podcast, but certainly at our events where they're talking about how they saw you at the one of the first seminars

Rocky

that you gave that Azaria or that you had come to their group to talk to them. What was that like?

Jamison

We had a lot of interest around it, I think, mostly, probably because of John's background. He had a lot of.

Rocky

Doubt about it. Yeah, a lot of credibility.

Jamison

And they said, OK, what's this guy up to? one thing he and I decided on and agreed to was that we weren't going to call our wealthy friends to fund the project. We wanted to test this is a business.

Jamison

We wanted to see if there was a market there. And if you go and just have your friends use it and write checks, then it's like you don't learn anything.

Rocky

That's a lot of discipline.

Jamison

So we agreed to that and we knew that would make it a little more painful. But we wanted to to do it the right way, and we had a lot of big meetings. I think there was a meeting.

Jamison

We had people out and one time all sitting there listening to us kind of muddle our way through the sales pitch of the project.

John

And I'll just tell you the same thing. I tell so many people that come to me and go, Hey, I want to do what you're doing like, OK, you can do what we're doing, but I want to make sure I understand something.

John

A lot of education, a lot of money we put into the building, who we are, the brand, the things we have to do. It's not easy, but it was definitely worth it. And I'm glad we did it this way.

John

Organically grew it to where it is. You know, a lot of room ahead of us. We're going to keep growing. The company keep doing things. But the idea that we've kept to the roots, we're allowing people that are not accredited or accredited invest.

Rocky

Absolutely.

John

We're opening it up nationally. More because of the rules are opening up. We're having more opportunities to find properties will be more diverse. We have properties in Flagstaff, but we bought . You know, you don't hotel, which you just walk today with, which is turning out then fantastic, even though I know we both sweated through some stuff

John

on it, like how are we going to do this because it was not the easiest transaction, but all that stuff kind of falls into place. So a lot of what we are doing is we're plowing a new road for ourselves in this business, and there's not a lot of the people out there.

John

I was absolutely convinced that we started this company or when crowdfunding laws came about that we would have so many more people doing it for all kinds of things. I kind of wish there was, but no.

Jamison

one thing I've learned is, you know, originally crowdfunding was around this idea that if you're a neighborhood grocery store, go out and raise a couple million dollars from the community to fund that grocery store. And in concept, I love the idea.

Jamison

The challenge is it takes so much work to find two or three people to throw in a few thousand dollars that it's really hard for the grocery store to go do that on one fundraise. And what we've learned is our first project, you know, we raised half a million dollars.

Jamison

Luckily, the seller was a friendly seller. He gave us six months to close on it and we were about three or four days away from not being able to close. But we basically raised the money right at the deadline, right?

Jamison

Took us six months and it took so much work to get investors. We had investors, all in Arizona and us in an average of . So we raised half a million dollars. My takeaway is you can't really do this on a one offering at a time.

Jamison

You have to be committed to it long term. And this year, for example, now we've started to see finally some of the benefits of that because we have a core investor base who really has bought in to what we're doing.

Jamison

And now when we bring new projects, they're ready to to go. But for one project at a time, it takes too much education to bring an investor for one project and then you never do anything again like that grocery store example.

Jamison

So.

Rocky

Right.

Jamison

That's why so many crowdfunding ideas ended up failing because it was so hard for them to raise the money. They just said, You know what? We're going to try something else. We're not doing this anymore. We kind of were a little later in the game.

Jamison

Launched in , a lot of the crowdfunding companies launched in , many of whom raised a lot of money venture capital, and they spent a lot of it. A couple of them went bankrupt because, yeah, they thought it was going to go like this.

Jamison

The business was going to go go bananas, you know, with online viral growth, right? We realized that's not quite how the business works, but it can still be a really great business if you have some patience with it.

Rocky

Were you guys ever interested in that route raising venture capital to do it or were you always committed to growing organically?

Jamison

That's not John style.

John

Well, it's also I saw Jamison just allude to that. We saw companies that did that. There are companies that started what we're doing, but they put all their time and effort into building the technology side. And because they spent all their money, all their time, their energy, the resource on that they didn't actually put together feasible offerings

John

and didn't have anything else built. It didn't work. And I also saw companies that went out and said, I got this great idea and pitched a whole bunch of VCs, venture capital companies and then now become so beholden to what they have to do that they put it simply, they feel like they're simply just a figurehead every

John

time they're out there pitching their company and doing it. But then they've pivoted and these companies have pivoted and some of them gone out of business. Some of have changed and are out of it completely doing something totally different with the real estate market.

John

But the whole point was we knew that we need to have good product, build our stuff organically, figure out how to make it work on it on a shoestring budget so we can be true to our investors.

Jamison

We funded it, so we put in a chunk of our own money. Yeah, to fund it. You know, it's commonly referred to as bootstrapping, so it means we're self-determination.

Rocky

It basically gives you the freedom to grow it, how you want to, to grow it as fast as you want. You are slow.

Jamison

That sounds great now, but when you're putting in the money that we put into it and then for four years, we were working in this business. In my case, full time. John, pretty much full time. He does have a B.A., but he spends a lot of time in this business without any income.

John

zero.

Jamison

And so we're.

John

All at risk. None of that money writing.

Jamison

A lot of checks. But to your point, now we have the ability to control our own destiny and we're not beholden to anybody and we have momentum. That's the goal of bootstrapping famous company as MailChimp. They bootstrapped constant contact, went, and raised a bunch of money.

Jamison

They grew faster right out of the gate, but they, the venture capital company, was always behind them, saying, Hey, you need to do this, you need to do this right. What ended up happening was, you know, out of the gate, constant contact went way up, but over time, MailChimp over has them because they had more of this

Jamison

organic approach to Let's start making money, let's be profitable. Let's make sure the product's really good. And now they're they're much better in constant contact. That's just one example, but we believed in the bootstrap model and we didn't want to lose control.

Jamison

And, you know, we're not trying to make a quick buck and five years and build a business. We're trying to build a business for the long term, and we were both aligned around that.

Rocky

And that's so important to have that core value shared. I will say that one of the main reasons that I invested initially in Wilson is that I knew you both had you had skin in the game. I was like, There's no way that you're going to let it fail.

Rocky

So, yeah, it gave me as an investor with no other experience with either of you, really. I knew Jamison peripherally. It came a confidence that I'm like, Well, I was there doing all this when really they could just go and find five high net worth individuals and they could make all the profit.

Rocky

I think they're really into it. I think they really believe in it. And it gave inspired a lot of confidence on my part.

Jamison

It was probably a year and a half ago. Things were tough. We're financing everything. We have some projects. We hadn't sold any projects yet and we had a, you know, Marlette was a tough project for us, learned a lot and the end result ended up being great.

Jamison

But there was a grind there and it was a time where I was kind of like, Man, when we're going to get some momentum. And I think one thing I've learned is when you're the hardest part, the lowest point may be the darkest moment you're closest to where you want to get to.

Jamison

I can see that now, but at that point we had had a an open house at our Marlette property had just finished, and that was a big accomplishment. But I went in a little less enthusiastic than you were your first six months, right?

Jamison

So you're in the messy middle at this point. And I went into the open house and I saw a guy in a hostel uniform. And this is an open house for our investors. My grandpa was a postal carrier for his whole life, and I immediately walked over to the guy and he said, Hey, I wanted to talk

Jamison

to you. I'm so excited about what you guys are doing, and I have to go to work here in a few minutes because, you know, they work on Saturday, so Saturday morning. But he said, I wanted to come see this.

Jamison

I'm an investor and I've been working this neighborhood for years. I saw your flier.

Rocky

As the postal carrier for that.

Jamison

Neighborhood, and I I never thought I'd be able to invest in something like this. Yeah, and he was so appreciative. And that's when it just it really hit me of why we're doing this. You know, we always wanted to open up real estate to more folks.

Jamison

And here's a guy who's working as hard as anybody and so excited to be able to invest in a project. And it's not for him, not necessarily the financial outcome, although that will be good. It was the fact that he could look at and say on a piece of this.

Jamison

And he knew the neighborhood. He knew where it was going. That's why you want to invest. And I don't. I think he invested a few thousand dollars, the guy standing next to him investor $,. We treat everybody the same.

Jamison

We don't. Everybody's an investor. So that was an aha moment for me. You know, you need those when you're going down that path. From that time on, it really helped me remember why we're doing what we're doing.