In this episode of Cash Flow Pro, we talk with Evan Holladay, President, and CEO Of Holladay Ventures. Evan worked for a developer while studying at the University of Louisville. His passion for real estate ignited. He began to look for new and...
In this episode of Cash Flow Pro, we talk with Evan Holladay, President, and CEO Of Holladay Ventures. Evan worked for a developer while studying at the University of Louisville. His passion for real estate ignited. He began to look for new and exciting projects. His first was a modular development company focused on taking houseboat manufacturing plants and refitting them to build modular, energy-efficient, and mixed-income multifamily housing. His mission became clear – to provide quality, attainably priced communities for working-class families. Since then, Evan has invested more than $225 million and developed over 1347 units of multifamily real estate.
His company, Holladay Ventures, focuses on affordable multifamily housing in the Southeast US. As a company, its mission is to build sustainable, quality housing that provides long-term positive returns for cities, residents, staff, and investors.
Today, Evan is here to share his experience developing multi-functional and attainable real estate.
In this episode, we discuss:
If you are interested in learning how to make your passive income have a more significant positive impact on your community, tune in to this episode to find out more!
Find your flow,
Resources mentioned in this podcast:
Casey Brown 0:00
All right. Hey there, and welcome to today's episode of cash flow Pro, your daily real estate investing podcast and YouTube channel. I want to welcome today, Evan holiday of holiday ventures, he and I were talking just a minute ago, and actually, we're only located about an hour, maybe an hour, 15 minutes away from one another. So I told him, I always love it when the cashflow Pro can connect right here in our backyard, so that we can maybe network and come up with a deal or find deals for our listeners, or whatever we can do. So Evan, how are you today?
Unknown Speaker 0:44
I'm doing well. Casey, thank you so much for having me on.
Casey Brown 0:47
Awesome, man. We're glad to have you here. And we're glad to connect and see if see if we can provide value to the listeners and value to you. And maybe we can learn something from one another. So why don't you start by telling us a little bit about yourself where you come from, and maybe and then kind of maybe transition into how you got into real estate and what made you see the light at the end of the tunnel and capital raising and whatever it is you got going on?
Unknown Speaker 1:09
Yeah, let's dive in. So a little bit about myself, I, like you said We're based here in Nashville, by way of I'm originally from Cincinnati area spent some time in Louisville. And really, what I found over the years is my passion is both helping people helping others, serving others, and just love the art of the deal putting deals together. And specifically real estate development. I just, I love development, I love how you can literally change a neighborhood forever, by being able to build, you know, our built environment that we live in every day. And we spend a vast majority of our day in buildings. So that's always fascinated me, I really kind of fell into real estate. You know, as a little kid, I wanted to be an architect, then I switched to wanting to be a doctor. And then I got to college. And I realized I hated science and I hated chemistry. So that was that was not a good fit for me. And but I but I saw a big student housing development, I went to University of Louisville, and I saw a big student housing development going on. And I was like, Man, I got to be a part of that something's calling me in. And you know, I followed that gut feeling and was able to get a connection to the developer. And I really, I had to, you know, prove myself to that developer. But I was able to get, you know, a couple 100 people out to his groundbreaking. And at that point, he's like, Alright, I think this, this young whippersnappers got something going on here. So I was the first one he hired. And I really just kind of learned the business soaked up as much as I could, and tried to surround myself with people like that developer who were making stuff happen, and really where I wanted to be and where I saw myself going. And that's where I learned all about real estate and development. But knew I wanted more. And, and I wanted also to do it with purpose. And so that's when really as part of a class in my entrepreneurship classes, and the business school, they're like, hey, put together a business. And I was like, Well, guys, my team, I was like, we're putting together real estate business. And we put together a modular development company, specifically for mixed income housing. So we did affordable workforce and market rate on the same development, we're able to do it modular, so we built it off site, and then shipped it to the, to the job site. And literally, we could build it in seven days. And and that just you know, snowballed into, we actually turned it into an actual business out of college. And we were very naive, we didn't really know anything about real estate development, but we just took action. And, and one thing led to another. And I ended up looking for development partners, because I knew that again, was the only way I could get break into this super high barrier to entry world was by finding people that were already in it and doing it and had that trusted network around them. And through looking for a partner, one of those groups said, Hey, how about you come work for us. And I ended up seeing that as a golden opportunity for me to really, you know, peel back the curtain and see how, you know, see how the sausage is made. Development, multifamily and affordable housing and doing public private partnerships, you know, working with the government to help create affordable housing, it's really complex. So I was like, rather than me try to learn and fail on my own, why don't I find a leader in the industry and a leader in the business and learn from them? Sure. That's exactly what I did. I worked with him for six years, did over 1000 units there. And then eventually it was like, Man, I feel like I could do this better. And we could do this bigger, better and with more impact. And that's when we started holiday ventures with the purpose of creating impact driven communities that are intentionally designed and developed. To create attainable housing, and wrapping that with resident empowerment services, so we can not just build affordable housing, but we can empower our residents to, you know, eventually get out of affordable housing and live their best life.
Casey Brown 5:13
Shoot. Yeah, man. That's, wow, I got it. I got a lot to unpack there. That's, well, the first thing I want to unpack Well, first two things I want to unpack is you said the words you said the word Louisville, correct. I knew when you start talking Cincinnati, and I wondered if I was like, and then yep, I love it when I don't hear somebody say the Louisville because it's Louisville. It's a Louisville. And so you said that right. So there we go. And the number two thing of course, we all know the great syndicator from the Cincinnati area who we I have taken a lot from and have learned so much from and is actually responsible for me having a daily podcast. And so you know, you definitely have the back, you know, the backstory there that leads you into to where you are now so. So by way of Cincinnati through Louisville, to Nashville. And then of course, you you made mentioned prior to the show that you were looking at some stuff in or even possibly doing a deal in in Clarksville, which is right, just right next door, a lot of military, military housing, stuff like that. Do you can you share a little bit about that, or can you talk about that?
Unknown Speaker 6:34
Yeah, it's really early stages, but we're looking at how can we provide affordable housing and attainable housing, we'd like to call it attainable, because affordable can have really negative connotations and a lot of people's mind. But attainable priced housing is what we're trying to build there. Clarksville, you know, is is a quickly growing city. And it's been great for the local economy. And, you know, it's just going crazy. It's like a boom town there. Oh, like many other cities across the country, but Clarksville has been doing really well. But a side effect of that is they have a lack of affordable housing for the working class families that have been there day in day out and building up that economy. And so there's been a lot of push for affordable housing. So we're still early stages. But But yeah, I love the love the market, love the city and would love to be able to do a development there.
Casey Brown 7:28
Yeah, I'll tell you, it's one of those. It's one of those cities that it benefits a lot much like we do here, just right across the state line and Hopkinsville because we have the military, we have the military establishment that that really kind of picks up our slack. But then we also and I said notice I said slack, because we also have a big industrial, you know, workforce. And then we also have agricultural. So we've got, you know, third, the three big segments right here for four things to really it's kind of the perfect storm in a way at times. And then at times when the military is gone it it can really, it can be kind of lean, you know, we have to try to make make things work. But but so so tell us a little bit about I'm not sure if you mentioned holiday ventures at what year was what year did you all kind of what years did all of this kind of take place?
Unknown Speaker 8:25
Yeah. So why I started working for that company in 2013. Right after I graduated college and holiday Ventures is we're coming up on our three year anniversary.
Casey Brown 8:36
Awesome. Awesome. Are that's great. And then what is what does holiday ventures what specific asset classes are you all focused on right now?
Unknown Speaker 8:48
Yeah, so our bread and butter, what we're our niche is probably 80% of what we do is affordable ground up new construction, okay. Usually with a mixed use component or a very unique aspect to the development. We do some market rate development ground up as well. We also do some acquisition of existing multifamily, but it's all multifamily. We prefer to be 200 plus unit communities. And to give you an A couple examples of the typical project that we do, nothing we do is really typical, but give you a couple of examples. We recently closed on a development with a nonprofit partner that does substance abuse recovery services, okay, they've operated out of this downtown location. Here in Nashville, we're like two blocks away from the Titan stadium. And they've they've really, they are sitting on very valuable land, and they wanted to expand their services, but not leave that location. So we figured out a creative way to be able to more than double their services and facilities and create a state of the art brand new building for them. They're going from fifth The beds, 232 beds. And then also on top of that build 192 affordable units or sorry, 195 affordable units and then phase two. So they're operating in the footprint of phase two and their existing buildings, we're going to move them into their new building. As soon as that happens, we'll build phase two. That will be another 289 workforce units, which will be like middle income range or lower middle income range. So that's one type of development, partnering with nonprofits doing Urban Development's. We're doing another one where we're partnering with a big corporate partner to provide 311 units, as well as first floor commercial space with an entrepreneurship center in a co working place. And partnering with nonprofits again to provide those services sharing and also building and designing very sustainably to LEED standards and LEED standards and above. And then we have one other one we're working on now that is geared now we're talking all the Nashville. Yep. Yeah. All in Nashville. We, we work throughout the southeast. But as of late, our most recent projects have been in Nashville, Louisville in Huntsville.
Casey Brown 11:13
Wow, isn't that something? Well, I'll tell you about five or six years ago. I was in Nashville, of course, we were there pretty regular just is the entertainment or whatever we're doing. But at one time, Nashville had something like if you said like east of the Mississippi, which is a term that those of us that live east of the Mississippi, that's what you hear it all the time. So there was something like 90% of all of this skyscraper cranes that were in the south, or in the east of the Mississippi were in Nashville or something along those lines, or something stupid like that, or, and when you drove down the interstate, you looked up there and that's all you saw, was just crank crank crank, I'm talking like 30 or 40 of them. And it was just an unbelievable sight to see all of this stuff expand and grow and and and here we are with a guy that's that's that's done it that seen it? That's been right there on the front lines. Now. I assume there was when you're talking about the substance a bit, I want to go back to the first example you gave us the substance abuse, Senator that you're that you're involved with there. And number one, the fulfillment that that must bring to know that you're actually available there to actually help somebody along with not only making a profit, but but being able to potentially change lives in different directions of may or may not otherwise have had the opportunity. But number two, the I assume are we talking over there like across the what used to be like if you would have called years ago across the tracks, where it was basically like I remember there was a movie movie when I was a kid called Adventures in babysitting, and adventures in babysitting. Like all it was all settled in these big warehouses where there was like car chop shops and some other stuff and all these kids anyway. But that's what it used to be. When I was a kid it was across the tracks. It was warehouse space. It was nothing but warehouse space abandoned warehouses that that is that is that some of the types of areas that we're talking about.
Unknown Speaker 13:20
There is a little bit of that around the Titan stadium, but really around us. You do have some existing public housing, but there are also you know, five storey luxury market rate one block away from us. So it's really kind of a hodgepodge right around us, but it's crazy man, everything in Nashville is just blowing up. And so they're they're currently talking about totally redeveloping the it's called the east bank or East Nashville. And they're talking about putting in billions of dollars into the east bank redevelopment, brand new Titan stadium that apparently is gonna cost $2 billion and redeveloping that entire space. So Oh, not to mention Oracle just announced at 500 jobs, you know, less than two miles from our site. So it's, it's I think it used to be a little bit of a not so great part of town. But it has definitely turned a leaf just with the amount of people in the amount of money that are that are coming into Nashville.
Casey Brown 14:20
Yeah. And the fact of the matter is, is it used to just be like, like when I was a kid, you would you would hear Nashville and like, immediately anybody that wasn't from around close with like, what are those Hicks doing down? You know, What are y'all gonna do this? Yeah, it was just it was something that was just so small. I mean, it wasn't small but I mean, it was it was just a it wasn't like it is now and it seems like Nashville and Austin are the two areas that just like like some something somewhere pour gas on their fire, like gas like straight gas and is gentle home I mean Yeah, and you It's, and it's been fun to watch. I mean from from because a lot of that business obviously from from a real estate sales standpoint has trickled our direction, as it's as it's grown out, and you know, and to be quite honest, we're only an hour away. So it's so it's we get to enjoy the benefits of Nashville, and not necessarily have to be all up in the gridlock or whatever you want to call it downtown or whatever. But so I want us to go back real quick to something you said. And there was a, there was a different word, you said affordable housing, it was attainable housing. And with a mixed use component. And I'd like to, I want to kind of hone in a little bit there. Because, you know, there's always been this, those of us in the real estate, or in the marketing business, or any type of marketing, have probably heard at one point or another the term, there's riches in the niches. And again, and I don't know that you can really get any more niche than saying, Hey, we're gonna put a mixed use component and that component. Explain that a little bit to us as to what maybe what's what, and I think I know where you're gonna go with it. But But I want to hear you just kind of maybe go a little deeper into that.
Unknown Speaker 16:18
Yeah, definitely. What, what I've learned through, you know, my 10 plus years in development, and also just constantly looking out for good quality development. And I, you know, I love just reading up also on prior development prior developers, you're going to ask about, you know, one of my favorite books, I already have that in my head, because it's about a developer. So my point is, I love learning about good quality development, because I think, you know, there's, there's the easy way to do development, and then there's the good quality way to do development. Sure. And I think, really, if you want to have a long standing, you know, well, the well designed and developed community, you have to have a mix of uses, I think are, the easy way to develop is just to single family over here, you know, do your commercial over here, do your apartments over here, do your hospitals over here, your schools over here. But really, if we are going to design and build a beautiful, long term, well used community and efficient community, it has to have a mix of uses. And so that's what we're always striving to do. So, you know, going back to a couple of examples, I said, like the partnership with the substance abuse recovery center, like we're not just building affordable housing, sure, building affordable housing and a substance abuse recovery center on the same block. And we're even building a bridge between the two, like a metaphorical bridge, where the substance use recovery graduates have first access to certain number of the units, so that we can help create independence on their journey towards you know, a sober life. Yeah. And so I think thinking outside the box of, you know, how can you make a unique community and create amenities directly on the first floor, you know, with apartments above. That's why we're doing like the entrepreneur and co working center, providing affordable space for our residents to start a business or grow their business, and mentorship and guidance in that space. And, you know, there's so many different ways to do that. But I think just thinking outside the box of just saying, instead of how can I build, you know, X number of apartments be like, How can I build a community that's going to create lasting change. And if you come at it with that lens, then you will actually think more outside the box, you'll think about partners you can bring in, it just makes it makes for a lot of fun in my eyes, it makes for more work, I think. But the work is way more fulfilling, like you, you mentioned before,
Casey Brown 18:55
sure, it gives you it leads with purpose. And if you lead with value and lead with purpose, you leave a legacy. And that's that's, I think gets lost in the in sometimes our chase for profitability. The the ability to leave a legacy is I think what a lot of us envision, but we envision that 80 years down the road, we don't envision getting that one little miniscule piece at a time. And so along with the profitability and the need to support our families, things like that are what leads to having buildings named after people and that's what leads to leaving, you know, having having things because it's the good that you've done, that gets to reflect in how you leave that so again, that's I really commend you on that because there's not a lot of debt again, that that element of it seems to get lost and all this entrepreneurial chase the element of okay, hey, bye I remember one time, my stepdad, he had just came home from a funeral. And he was he was middle aged, I guess like myself is like I am now. And he was he was very kind of like, I don't know the word, the best word to describe it would be like melancholy. You know, he was just like, Yeah, you know, just like he just had lost his errand. And he said, you know, he said, one of the things that I think and he and I got to talking, and he said, one of the things that I think about is, what are they going to say about me? When I'm up there? Like, what, what is what is what I'm leaving? And I feel like, you know, he did, he did a job of raising us that I think that that is definitely a legacy that's going to last at least as long as we do. So Nevertheless, I know that's that's kind of I think that's that's everybody's picked me up for the day. But I just, you know, that's that's very, very interesting. And so I want to transition this talk a little bit towards the capital raising side. And like, most people, I'm assuming that you are you raising through 506 B 506 C's? Are you? Are you just accredited? And kind of tell us how does that landscape look? And then we'll kind of dive maybe into a few little spots there.
Unknown Speaker 21:14
Yeah, definitely. So we have, honestly, we don't we don't have a specific type of raise that we do. Every project is different. Yeah.
Casey Brown 21:24
Every Yeah, everything you've told us has been like, that the elements and stuff is so involved. That's great. I'm gonna go ahead.
Unknown Speaker 21:30
Yeah, yeah. So we do, we do multiple different offerings for our investors. And we like to call our investors our impact investors, because they do get that impact component, when they're investing, they can feel good about what their money is going towards, and are in a recession resistant return all at the same time. I think that's one of the beautiful things about what we do about in affordable is, you feel good about the capital you're putting out. And because it's affordable, the long term need is always going to be there. So you have this built in risk mitigation for your capital. And you can make competitive returns just with any other type of real estate. So just one of the many reasons why I love affordable housing. But to your point of how do we raise and what you know, what do we do on a raising side or capital raising side. So we work with typically work with high net worth individuals raising. On our development side, we raised like a pre Development Fund, either per project or we're, we're actually going to be launching an Impact Development Fund this year, so our investors can be diversified over five different projects at a time. And those typically return either eight to 10% preferred return. And, and they get really the the downside mitigation by having first right to the to basically the title to the land. What we do is we, as we're working on these developments, we're working with architects, engineers, third party reports, third party vendors, putting all that together, getting it ready to be built and constructed. Well, that process takes usually takes two to three years and roughly about $3 million worth of capital. So that's, that's usually we'll spend the first 100 grand of our own capital, usually the riskiest capital to make sure the project is moving forward. And then once we know it's a go, that's when we bring in our impact investors and bring them along for for the pre development cycle. And those are typically like a two to three year investment cycles. So the shorter, but a preferred return so they can turn their cash quickly. Sure, you can choose to basically reinvest in the next deal if they want to reinvest in the fund.
Casey Brown 23:45
Is that, okay? So you're saying let's buy the deal. And then we need to get the fund set up, then people can, as some of those earlier investments start to mature, they can make if they want to reinvest, they can reinvest into the fund across five deals,
Unknown Speaker 24:00
right, right. And even in the fund, they can choose to just keep their their principal investment amount, just keep it in the fund, and then it just continues to reinvest every time we have a new deal.
Casey Brown 24:10
Awesome, man, that's great. And, you know, this, this whole funds, stuff is, and I knew it was going to come where some creativity was going to start with with because you see, you know what, like, like, for instance, we're a fund of funds. And so we basically had like, they everything is kind of predefined, and you come in and you've got this square box, and you've got this stuff that fits in the square box. And here it is, and we're a fund of funds and we're going to reinvest, but as a new as time went on, or as time goes on, it's going to they're going to continue to get more and more creative with how because it was really difficult at first for people to understand that if I wanted to invest all in one project that I needed to be per project and not necessarily on a fun level. But anyway, neither here nor there. The so so people can roll out of individual investments into the fund and be diversified across five projects. And then of course, do you have individual like, like, obviously, there's boots on the ground in different spots. But you said you're across Huntsville, Nashville, and what was your mobile? And so you have I guess I'm assuming separate crews for each that, that you that kind of and then an onsite managers such as that.
Unknown Speaker 25:25
Yeah. So onsite management on site maintenance. It typically if they're for our 20 Plus unit communities, that's, you know, anywhere from four to six people, a team of four to six, both on the management, leasing and the maintenance side.
Casey Brown 25:40
Awesome. And you said eight to 10%, pref? Is that kind of what you're expecting the fun to look like? Or is that just kind of past stuff that you've you've done in the past? Is that kind of how it's yielded, or?
Unknown Speaker 25:52
Yeah, those are past deals, the fund will probably be we haven't finalized the structure, but it'll probably be like an 8% pref. And then there'll be a one to 2% kind of bonus allocation. Whenever we close deals.
Casey Brown 26:04
Awesome. And then I'm assuming some hurdles and stuff is there such as that as, as the IRR, climbs, something along those lines,
Unknown Speaker 26:14
not in the fund. But we do have like individual projects where they can invest for the long term as part of the ownership group of the developments. The fund is just more of like a pre development more of like a cash flow.
Casey Brown 26:28
You do some planning to it loads, it lets you see what what capitals there that needs to be allocated. And you can kind of start planning some of that stuff around that too, I guess, right? Yep. Awesome. Awesome. Well, listen, I want to first of all, I want to thank you for being with us today. I mean, obviously, like I said, it's it's not every day, I get somebody that's an hour away to be on our show. We have people all over the country and actually all over the world. As it seems like we we've gathered some more folks that want to be on and want to talk and want to be heard. And so. But I'd like to of course as as I end most every show or have recently began ending every show, I'd like to for you to tell the listeners what's what is your favorite book that you've read? And it doesn't. It doesn't even have to be real estate. But what what do you feel like has has been your maybe a catalyst, a book that was kind of a catalyst for you to really get you going and get you headed in the right direction?
Unknown Speaker 27:24
Well, I would definitely want to bring up a book that I recently read. That's called zek. And dwarf by it's about a developer, it's an autobiography about a developer. His name is William second Dorf. And if you have been to New York, then you've probably seen one of his buildings. He developed quite a bit of the modern day skyline of New York, and even developed in many, many other cities. And his big thing was developing unique communities. And so I had already had that philosophy. I didn't know that was his philosophy before I read the book. And I saw that and I was like, That's exactly how I think it's really about creating unique communities. And that will create a better investment, it may cost you more upfront, but it will create a longer term viability for your community and better impact for your residence or whatever the product type is, you're just going to create a better community, which in the long term will create better returns and just a beautiful property?
Casey Brown 28:26
Sure, sure. Man, that's awesome. And my wife and I traveled Italy recently. And and when you're talking about, you're talking about how, like, if you've been in New York, you've seen his buildings or whatever. And it's so funny to me how how, like, things over there are broke down into who the like, they broke down into periods, and then they're broke down into who was the architect involved, and so on and so forth. And, and so it's very interesting. It's very interesting to see, like, old Rome was the same way. Like, like down at the, you remember what they called the forum, and you see all that stuff. And they're like, oh, yeah, well, so and so did this. And then when when and it was just, it was all kind of centered around the guy that whose idea it was, again, there you go there back to the word legacy. So But anyhow, so tell us what, what is. What is like a either a dream trip that you've either taken or that you hope to take, and possibly enjoy someday?
Unknown Speaker 29:26
Yeah, great question. I would say my current dream trip is going to Zion National Park, which we're going to go to later this year. So that's what I'm picturing right now.
Casey Brown 29:40
That's great. That's that's a that's a, that's going to be a good trip, for sure. And so with that, we're kind of approaching the end of our, of our show. And I'd like for you to even tell the hat tell the listeners how they can reach out to get in touch with you, whether that be via email or your website. or whatever it is you'd like or however you'd like for somebody to reach out maybe they want to be an investor or or you've said something here then they want to maybe pick your pick your brain a little bit about what what's the best way for them to reach out to you.
Unknown Speaker 30:10
Yeah, definitely. Our website Evan Holliday and holiday spelled H O LL, a da y. Evan holiday.com. That's the best place to see everything we're doing. And then my email is Evan at Holliday, ventures.com.
Casey Brown 30:25
Awesome, man. That's great. Well, I want to I want to take a second to thank you so much for being on today. We really appreciate it we always enjoy when especially when developers come on here because development is something that a lot of us as as like apartment syndicators, if you will, is kind of I guess the term that we use a lot. We don't see a lot of the development because a lot of times but time something syndicated, it's obviously already there and functioning and all of that stuff is but man, thank you so much for your time.
Unknown Speaker 30:54
Yeah. Thank you for having me on, Casey. Yes, sir. Absolutely.
Casey Brown 30:56
Thank you. Hope everybody has a wonderful rest of the day.
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