CrowdStreet's Brent Hieggelke is joined by Dr. Adam Gower, Founder of Gower Crowd, to discuss why he decided to change career paths from institutional investing to teaching investors about online real estate syndication, the role technology has had in disrupting commercial real estate spurring the need for investor education and the how he believes COVID has been a catalyst for accelerated growth in the use of online CRE syndication.
Brent Hieggelke, Chief Marketing Officer
CrowdStreet
CrowdStreet
Brent is a high-growth tech marketing executive focused on start-up and early category innovators and disrupters. He is a seasoned evangelist, and public speaker across a wide-range of topics.
He is a former CMO of several leading SaaS companies such as Urban Airship (mobile), Brandlive (video), Webtrends (data and analytics) and Touch Clarity (AI, machine learning), which sold to Omniture. In 2009, Brent co-founded a real estate start-up, Second Porch, which built the first sharing vacation rental site and ultimately exited to HomeAway, now Expedia. Brent has keynoted and led panels at global events like SXSW, Mobile World Congress, Cannes Lions, Advertising Week, Adtech, and hundreds of other conferences. Brent has been featured or quoted in The Wall Street Journal, Forbes, Advertising Age, and hundreds of other publications.
Brent holds a BA in Economics with honors from the University of Chicago.
00:00:04 Hello, welcome to another edition of StreetBeats. I'm Brent Hieggelke, Chief Marketing Officer of CrowdStreet. And as always, we're here to bring you, uh, some of the industry influencers, uh, round commercial real estate, and we're really excited today to bring you Dr. Adam Gower. He runs Gower Crowd and is a real, uh, early supporter and influencer within online syndication, a k a crowdfunding. And so Gower Crowd is his organization and is a, just a pla has a plethora of resources, um, its own podcast series, video, podcasts, books, et cetera. I'll let him talk about it, but, uh, anyway, Adam, great to see you and welcome to StreetBeats.
00:00:52 Nice to see you as well, Brent. Thanks so much for having me on.
00:00:55 Yeah, yeah. Well, let's dig in cuz I know, uh, you and I have, have spoken many times and, and can go on and on, so, uh, we'll be efficient. But why don't you talk about, you know, your background and how you got into online syndication in the first place.
00:01:09 Oh, nice. Thank you. Yes. Uh, and before we actually do, so, I do want to thank you. You did say that StreetBeats was specifically for industry Liebers, so I'm really grateful that you've had me on. Anyway, <laugh>. Uh, so, alright, so with that said, my background is in real estate investment and finance for a hundred years. I actually started pulling wires for an electrician in 1982, but I know this is only a short episode, so I'm not going to give you the full details. Basically what happened was I did a lot of institutional, uh, investing. I, I headed up Universal Studios and Paramount Studios in Asia Pacific doing their real estate. Uh, I did a lot of syndication for multifamily houses in the 1980s. Uh, I ended up working for a bank joining the last downturn. They brought me in as a real estate guy, uh, to help them clean their balance sheet.
00:02:06 This was 2008, uh, for a little while. And then I went over to Colony Capital where they'd done a lot of deals with the F D I C. So it was billions of dollars of non-performing loans collateralized by real estate. But what brought me here today was actually a career change. And it was actually a realization in about five, six years ago of the intersection between technology and digital marketing that has disrupted all other industries with real estate as a result of the Jobs Act of 2012. And so I was, I had, um, I'd been doing some seed investing, some angel investing and was learning a new language, uh, at the time. That was the language of digital marketing when the jobs act passed. And so that's how my career changed. I just thought, wow, this is my industry that I've been in for 30 something years is dramatically going to be impacted by these changes and I want, uh, I wanna learn about it. And so that's what I did. I kind of buried myself in digital mar in digital marketing.
00:03:26 Great. And you really approached it from an investor, but with the background of your, your industry experience in real estate. So that's, you really did have a, a kind of a unique perspective on it.
00:03:38 Yeah, it was, the immediate realization was from, actually from the investor perspective, this sense that people that had never had the opportunity to invest in commercial real estate, okay, I've ra I'd raised a lot of money during my career, uh, but they'd all be all being in-person meetings. I had spent my life networking and joining clubs, joining foundations, going to networking events, sitting around boardrooms, hoping I'd meet somebody that would know somebody who maybe knew somebody that I could present my deals to or whatever. I mean, it was like a whole major performance. And I realized that suddenly and, and those people who would invest had contacts, they had connections, right? They were in these kind of small cliquey groups of, um, high net worth individuals who knew sponsors so that they, they had access. And so when the acts passed, it occurred to me, gosh, suddenly now millions of people that have never had access to commercial real estate investing are gonna have access.
00:04:53 And knowing what I knew behind the scenes as a developer, my immediate thought was, these people need educating <laugh>. Right? They, they have to, it's too easy to be seduced by real estate as I was in the early 1980s. I lost everything actually, by the way, in the early 1980s. Uh, right. But, uh, but I only lost what I made. Does that make sense? It was like it was all on paper. Yeah. And I just thought, you know, this is, I, I want to teach people about real estate investing so they can make wise decisions when this flood of opportunity hits and when they discover crowdfunding.
00:05:37 Is that then when you started Gala crowd? That was
00:05:40 The big It is actually, yeah. Right at the very, very beginning. That's exactly right. I actually, I wanted to teach actually how to invest prudently and wisely. And so I started, I got a PhD <laugh>, right, which gave me, just personally, I always had this imposter syndrome, that's what it's called, right? Imposter syndrome. I thought, you know what, I, people are always, um, everybody knows more than me is what I always figured. And then I got a PhD and I thought, ah, I can teach now. I've actually got a credential. And so I started, uh, I actually went to the local university deliberately to learn how to teach, how to invest in crowdfunded deals. I wanted to actively do that in front of an audience and the best way to do it was at the university. So I stood in front of hundreds of students and created courses that I then produced into online courses that they, you know, that were basically taken from that. And then, as you know, I wrote books as well about it. But yeah, so I, that's what I did. I learned how to teach.
00:06:50 How do you think about the industry today? And are you still as excited now as you were, you know, back when you did, you know, get your PhD and started teaching? I mean, that's a lot of energy. What, what's your take on the industry right now?
00:07:04 So it's funny to say, am I still as excited? The first thing that came to my mind as you asked that question was, no, I am a thousand times more excited than I was then. I am constantly reassured that the decision that I personally made to step into a world outside of direct development myself and into a world of crowdfunding was the right decision. Because, you know, this is what has happened during this crazy time that we've been living in everything that we've been doing up until Covid, when everyone was driving to offices, uh, and working in offices, right, was um, just the very, very beginning. We looked at the growth of crowdfunding as being like a hockey stick growth. But what's happened over the last few months has accelerated that trend and my sense, actually of what that trend looks like. And by the way, I do talk to frequently institutional investors.
00:08:13 My background is also largely institutional, and they have no clue yet. It's crazy what's coming towards them. And so my sense actually of the growth of crowdfunding is that we are not all the way up here and I'm drawing a picture of hockey stick. For anyone that's just listening, um, we're not at the top of the hockey stick, you know, growth actually b even though that's where we think we are, thought we were, I actually think we're right at the very beginning of that growth. We just barely started. And that what we will see that has been accelerated by the fact that everyone's working remotely over the last few months, we will see massive growth. We barely started, barely, barely started, and yet it's still huge.
00:08:59 Yeah, that's great. That's great. So for the audience here, you know, they're still at the early, early times of this industry,
00:09:06 Right? Yeah. It, this is the, yeah,
00:09:09 I would agree that we know when Covid hit, you know, we saw the industry just kind of come to a halt cuz debt locked up, but then very quickly it came back and came back very strong. You know, we, we've uh, been very pleasantly surprised to see the supply and demand just kind of, you know, strong all summer and into the fall. So I think you're right. I think we're seeing an accelerant of all things digital, including online investing in commercial real estate. So,
00:09:41 Uh, well that,
00:09:43 That brings us to the fact that you just published a book. I understand. Talk about that a little bit.
00:09:47 I did just publish it. Yes. You have a copy. I did. I'm going to, for those who are not actually listening, I'm gonna waft it up on the screen here. Here it is. It's actually called, it's not a difficult title to understand what it's about. I got it right today. Real Estate Crowdfunding and Insider's Guide to Investing online. And this is actually taken from the courses, uh, that I taught. Uh, this, this is, it's kind of a, it's a bit 1 0 1 <laugh>, right? So if you're really expert, it's not gonna be ideal. Uh, but, uh, I do ha there are some sections that are deep dives as well into the things to look for. And it's really from my perspective, some of the things, look, here's the thing about real estate. This is what I, this, this is important to understand as an investor, there is no central school of real estate development.
00:10:41 There isn't a, you don't qualify as like a lawyer where you have to pass exams or as an accountant where you have to pass exams. As a real estate developer, they are educated based on their experiences, based on what they do, based on their background. And so everybody has a different perspective of what real estate is. It's entirely dependent on your experience. Every developer, for example, will see concepts differently. They'll see the I r R, you could, you could run us what is the I r r, what is the internal rate return? And you'll get, you know, a million responses. And ev everyone will be subtly nuanced differently. What's important is understanding how a specific developer sees these concepts. Let them educate you on their perspective. And so the idea of this book was to give you my perspective and to say my perspective is everyone's perspective is different. So understand that and you will be able to differentiate better, good from less good if you like, when you're looking at
00:11:57 Deals. Well, Dr. Gower, thank you so much for joining us on the StreetBeats. It's always a pleasure to talk to you. Uh, if somebody wants to find your book, where would they go?
00:12:06 Uh, go to Gower crowd.com. Actually, it's emblazoned on the front page. <laugh>, you can't miss it. It's all over. Just scroll down any page and something will pop up and hit you,
00:12:18 <laugh>. Okay, sounds great. And to our audience, thanks for tuning into another version of StreetBeats and as always, you can subscribe, uh, just give us your email and we'll send you kind of a recap of the week's edition. So thank you and we'll see you soon.
00:00:52 Nice to see you as well, Brent. Thanks so much for having me on.
00:00:55 Yeah, yeah. Well, let's dig in cuz I know, uh, you and I have, have spoken many times and, and can go on and on, so, uh, we'll be efficient. But why don't you talk about, you know, your background and how you got into online syndication in the first place.
00:01:09 Oh, nice. Thank you. Yes. Uh, and before we actually do, so, I do want to thank you. You did say that StreetBeats was specifically for industry Liebers, so I'm really grateful that you've had me on. Anyway, <laugh>. Uh, so, alright, so with that said, my background is in real estate investment and finance for a hundred years. I actually started pulling wires for an electrician in 1982, but I know this is only a short episode, so I'm not going to give you the full details. Basically what happened was I did a lot of institutional, uh, investing. I, I headed up Universal Studios and Paramount Studios in Asia Pacific doing their real estate. Uh, I did a lot of syndication for multifamily houses in the 1980s. Uh, I ended up working for a bank joining the last downturn. They brought me in as a real estate guy, uh, to help them clean their balance sheet.
00:02:06 This was 2008, uh, for a little while. And then I went over to Colony Capital where they'd done a lot of deals with the F D I C. So it was billions of dollars of non-performing loans collateralized by real estate. But what brought me here today was actually a career change. And it was actually a realization in about five, six years ago of the intersection between technology and digital marketing that has disrupted all other industries with real estate as a result of the Jobs Act of 2012. And so I was, I had, um, I'd been doing some seed investing, some angel investing and was learning a new language, uh, at the time. That was the language of digital marketing when the jobs act passed. And so that's how my career changed. I just thought, wow, this is my industry that I've been in for 30 something years is dramatically going to be impacted by these changes and I want, uh, I wanna learn about it. And so that's what I did. I kind of buried myself in digital mar in digital marketing.
00:03:26 Great. And you really approached it from an investor, but with the background of your, your industry experience in real estate. So that's, you really did have a, a kind of a unique perspective on it.
00:03:38 Yeah, it was, the immediate realization was from, actually from the investor perspective, this sense that people that had never had the opportunity to invest in commercial real estate, okay, I've ra I'd raised a lot of money during my career, uh, but they'd all be all being in-person meetings. I had spent my life networking and joining clubs, joining foundations, going to networking events, sitting around boardrooms, hoping I'd meet somebody that would know somebody who maybe knew somebody that I could present my deals to or whatever. I mean, it was like a whole major performance. And I realized that suddenly and, and those people who would invest had contacts, they had connections, right? They were in these kind of small cliquey groups of, um, high net worth individuals who knew sponsors so that they, they had access. And so when the acts passed, it occurred to me, gosh, suddenly now millions of people that have never had access to commercial real estate investing are gonna have access.
00:04:53 And knowing what I knew behind the scenes as a developer, my immediate thought was, these people need educating <laugh>. Right? They, they have to, it's too easy to be seduced by real estate as I was in the early 1980s. I lost everything actually, by the way, in the early 1980s. Uh, right. But, uh, but I only lost what I made. Does that make sense? It was like it was all on paper. Yeah. And I just thought, you know, this is, I, I want to teach people about real estate investing so they can make wise decisions when this flood of opportunity hits and when they discover crowdfunding.
00:05:37 Is that then when you started Gala crowd? That was
00:05:40 The big It is actually, yeah. Right at the very, very beginning. That's exactly right. I actually, I wanted to teach actually how to invest prudently and wisely. And so I started, I got a PhD <laugh>, right, which gave me, just personally, I always had this imposter syndrome, that's what it's called, right? Imposter syndrome. I thought, you know what, I, people are always, um, everybody knows more than me is what I always figured. And then I got a PhD and I thought, ah, I can teach now. I've actually got a credential. And so I started, uh, I actually went to the local university deliberately to learn how to teach, how to invest in crowdfunded deals. I wanted to actively do that in front of an audience and the best way to do it was at the university. So I stood in front of hundreds of students and created courses that I then produced into online courses that they, you know, that were basically taken from that. And then, as you know, I wrote books as well about it. But yeah, so I, that's what I did. I learned how to teach.
00:06:50 How do you think about the industry today? And are you still as excited now as you were, you know, back when you did, you know, get your PhD and started teaching? I mean, that's a lot of energy. What, what's your take on the industry right now?
00:07:04 So it's funny to say, am I still as excited? The first thing that came to my mind as you asked that question was, no, I am a thousand times more excited than I was then. I am constantly reassured that the decision that I personally made to step into a world outside of direct development myself and into a world of crowdfunding was the right decision. Because, you know, this is what has happened during this crazy time that we've been living in everything that we've been doing up until Covid, when everyone was driving to offices, uh, and working in offices, right, was um, just the very, very beginning. We looked at the growth of crowdfunding as being like a hockey stick growth. But what's happened over the last few months has accelerated that trend and my sense, actually of what that trend looks like. And by the way, I do talk to frequently institutional investors.
00:08:13 My background is also largely institutional, and they have no clue yet. It's crazy what's coming towards them. And so my sense actually of the growth of crowdfunding is that we are not all the way up here and I'm drawing a picture of hockey stick. For anyone that's just listening, um, we're not at the top of the hockey stick, you know, growth actually b even though that's where we think we are, thought we were, I actually think we're right at the very beginning of that growth. We just barely started. And that what we will see that has been accelerated by the fact that everyone's working remotely over the last few months, we will see massive growth. We barely started, barely, barely started, and yet it's still huge.
00:08:59 Yeah, that's great. That's great. So for the audience here, you know, they're still at the early, early times of this industry,
00:09:06 Right? Yeah. It, this is the, yeah,
00:09:09 I would agree that we know when Covid hit, you know, we saw the industry just kind of come to a halt cuz debt locked up, but then very quickly it came back and came back very strong. You know, we, we've uh, been very pleasantly surprised to see the supply and demand just kind of, you know, strong all summer and into the fall. So I think you're right. I think we're seeing an accelerant of all things digital, including online investing in commercial real estate. So,
00:09:41 Uh, well that,
00:09:43 That brings us to the fact that you just published a book. I understand. Talk about that a little bit.
00:09:47 I did just publish it. Yes. You have a copy. I did. I'm going to, for those who are not actually listening, I'm gonna waft it up on the screen here. Here it is. It's actually called, it's not a difficult title to understand what it's about. I got it right today. Real Estate Crowdfunding and Insider's Guide to Investing online. And this is actually taken from the courses, uh, that I taught. Uh, this, this is, it's kind of a, it's a bit 1 0 1 <laugh>, right? So if you're really expert, it's not gonna be ideal. Uh, but, uh, I do ha there are some sections that are deep dives as well into the things to look for. And it's really from my perspective, some of the things, look, here's the thing about real estate. This is what I, this, this is important to understand as an investor, there is no central school of real estate development.
00:10:41 There isn't a, you don't qualify as like a lawyer where you have to pass exams or as an accountant where you have to pass exams. As a real estate developer, they are educated based on their experiences, based on what they do, based on their background. And so everybody has a different perspective of what real estate is. It's entirely dependent on your experience. Every developer, for example, will see concepts differently. They'll see the I r R, you could, you could run us what is the I r r, what is the internal rate return? And you'll get, you know, a million responses. And ev everyone will be subtly nuanced differently. What's important is understanding how a specific developer sees these concepts. Let them educate you on their perspective. And so the idea of this book was to give you my perspective and to say my perspective is everyone's perspective is different. So understand that and you will be able to differentiate better, good from less good if you like, when you're looking at
00:11:57 Deals. Well, Dr. Gower, thank you so much for joining us on the StreetBeats. It's always a pleasure to talk to you. Uh, if somebody wants to find your book, where would they go?
00:12:06 Uh, go to Gower crowd.com. Actually, it's emblazoned on the front page. <laugh>, you can't miss it. It's all over. Just scroll down any page and something will pop up and hit you,
00:12:18 <laugh>. Okay, sounds great. And to our audience, thanks for tuning into another version of StreetBeats and as always, you can subscribe, uh, just give us your email and we'll send you kind of a recap of the week's edition. So thank you and we'll see you soon.