Today’s guest is Andy Crebar.
Andy is the CEO and co-founder of GP Flow which is on a mission to unlock the potential of real estate. He’s spent his career working in fintech and real estate and lives in New York with his young family.
Show summary:
In this podcast episode, Andy Crebar discusses his background in fintech and real estate, as well as the development of GP Flow as a platform to help real estate sponsors and LPs. He explains how GP Flow was created by understanding the pain points of sponsors and LPs and offers insights into their integration with existing CRM workflows. Andy also talks about HoneyBricks, a crowdfunding platform they built using GP Flow, and discusses the Equal Opportunity for Investors Act, a proposed legislation that aims to allow financially sophisticated individuals to become accredited investors. Sam and Andy both express their enthusiasm for the potential impact of this legislation on private real estate investment.
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Intro [00:00:00]
Background and Experience [00:00:40]
Development of GP Flow [00:04:11]
The evolution of the real estate industry [00:08:31]
Differentiating GP Flow from other investor portals [00:09:45]
Honey Bricks as a crowdfunding platform [00:12:42]
Equal Opportunity for Investors Act [00:17:10]
Expanding the Market for Non-Accredited Investors [00:18:09]
Challenges with Accredited Investor Requirements [00:19:03]
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Connect with Andy:
Linkedin: https://www.linkedin.com/in/andycrebar/
Twitter: @andycrebar
Connect with Sam:
I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.
Facebook: https://www.facebook.com/HowtoscaleCRE/
LinkedIn: https://www.linkedin.com/in/samwilsonhowtoscalecre/
Email me → sam@brickeninvestmentgroup.com
SUBSCRIBE and LEAVE A RATING. Listen to How To Scale Commercial Real Estate Investing with Sam Wilson
Apple Podcasts: https://podcasts.apple.com/us/podcast/how-to-scale-commercial-real-estate/id1539979234
Spotify: https://open.spotify.com/show/4m0NWYzSvznEIjRBFtCgEL?si=e10d8e039b99475f
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Want to read the full show notes of the episode? Check it out below:
Andy Crebar ([00:00:00]) – For us, it’s really just about understand the customers. We’d spend hundreds of hours with GPS watching them use existing tools and asking them, you know, what spreadsheets do you hate? Like, Oh, this spreadsheet always got to come back to this because this thing does that thing. But then you track it here and you’re like, okay, there’s an opportunity there. And when you hear enough of sponsors talk about the same spreadsheet that they’re using to solve a specific problem, it’s like, okay, there’s something there’s something that we can help them be more efficient on board, more capital and, you know, work with more investors.
Sam Wilson ([00:00:27]) – Welcome to the How to Scale commercial real estate show. Whether you are an active or passive investor, we’ll teach you how to scale your real estate investing business into something big.
Sam Wilson ([00:00:40]) – Andy Graeber is the CEO and co-founder of GP Flow, which is on a mission to unlock the potential of real estate. He spent his career working in fintech and real estate. He lives in New York with his young family.
Sam Wilson ([00:00:50]) – Andy, welcome to the show.
Andy Crebar ([00:00:52]) – Thanks for having me, Sam. Excited to be here.
Sam Wilson ([00:00:54]) – Absolutely. Andy The pleasure is mine. There are three questions I ask every guest who comes on the show in 90s or less. Can you tell me where did you start? Where are you now and how did you get there?
Andy Crebar ([00:01:03]) – Sure. So I started my life in a place called Sydney, Australia, and then moved to the US in 2015 with my my girlfriend, now wife. Since then, I’ve been working in FinTech as a real estate, as you mentioned. What really changed for me? Probably due to the pandemic over the last ten years, my wife and I had acquired a few single family rentals and apartments, but we got crushed during Covid. Places went empty. We were doing concessions, a ton of management, and then we went really deep on multifamily. We found there’s lots of great syndicators across the country, lots of great sponsors, great deals, aligned incentives. So we started a flow that focused on helping build better software for them and unlocking new capital pools and markets and getting more LPs invested in these deals.
Andy Crebar ([00:01:44]) – Today, as you mentioned, live in New York, we’re really excited to share what we do and how we can help both sponsors and LPs in private real estate.
Sam Wilson ([00:01:50]) – There are a lot of moving pieces. I feel like in that short story you just told 2015, you moved to the States girlfriend, you’re involved in fintech. I mean, were you involved in tech before you came to the States? There had to be a background in there somewhere.
Andy Crebar ([00:02:05]) – I was actually involved in technology banking. I worked at a company called Macquarie Group, which is well known in Australia. They do some stuff around the world but very well known in Australia. Investment banking. I did that for five years, was fantastic. Got knee deep in models and presentations and financial calculus and that sort of stuff. But I knew my future was in technology and knew the best place to be in technology at the time was in San Francisco, so we moved there in 2015, packed up all our stuff, arrived with a couple couple of backpacks and a dream, and we just got underway doing it from there.
Sam Wilson ([00:02:38]) – Wow. That’s really that’s that’s inspiring. And then you said Covid came around. You owned some single family rentals, maybe some apartments along the way. This is not. But three years ago. And you kind of in my own summary, got your teeth kicked in in Covid. Does that sound about right?
Andy Crebar ([00:02:57]) – Yeah, that’s a good analogy. Let’s run with that. Got my teeth kicked in. But my journey with real estate started from a young age. My dad’s actually an architect, and he’s always taken me around. You know, on weekends it would have been moving my brother or sister change house or helping someone renovate the kitchen or whatever it was. And he taught me two things that really stood out with me. One was how beautiful real estate is, but also how it’s a platform for building financial wealth. And those two lessons really stuck with me. So then the first chance I got to buy property was in 2012. We bought a small one better, which we converted to two in a place called Bondi in Sydney, and that’s really where I got my fix.
Andy Crebar ([00:03:33]) – I was like, Wow, we can actually improve these things, generate wealth and also improve the quality of life of people living in these buildings. And that’s where we we started aggressively, you know, buying and investing over the last ten years. And we’ve been lucky to now own property in in Australia, in the US and Canada, which is where my wife’s from.
Sam Wilson ([00:03:48]) – That’s really, really awesome. So, so you made it through the but it sounded like in that in that period during Covid, you know, you said you started working with multifamily sponsors and people around the country. You said, okay, and how and in what? In what capacity were you working with them as an investor, As a co-sponsor? As what? What was that?
Andy Crebar ([00:04:11]) – So it was actually the catalyst is really during Covid, we have a few places in Bondi and in Sydney and Bondi, a tourist town like I think 50% of the apartments get rented out to tourists and backpackers. And when Covid came in, laws came in.
Andy Crebar ([00:04:27]) – Everyone, all the expats from around the world went home one day, pretty much went half vacant because everyone that you know, might be a Brit hanging out in Australia had to go home now. So all these places were vacant. So we had our places go empty for months. A couple other places in the US also had some challenges around concessions and supporting people to not move them out of their out of the place. And that’s when it really switched me, which is like I know real estate to the path, but like managing a single family apartments and houses is really tough to scale, right? That’s what led me to multifamily, which was like, Wow, people are doing this at bigger scale with more diversification, better returns and LPs can get 15% of their money investing passively in other people’s deals. Wow. That’s what we want to go with it. And that’s what really let me down the multifamily path and getting started and working with GPS and LPs.
Sam Wilson ([00:05:16]) – How did you discover the GP flow, your GP flow like it seems like that would have been let me just maybe I’m a slow learner, but the processes that you’ve developed inside of that would would have probably taken me a decade to figure out.
Sam Wilson ([00:05:33]) – And it seems like you’ve somehow taken all of those lessons and compiled them, not just compiled those lessons, but then also made a platform for others to use very, very quickly. How did you do that?
Andy Crebar ([00:05:46]) – Three two factors in that. So me and my co-founder and my CTO at our last company, we built B2B software in FinTech. It worked out well for us. We’d both be investing in real estate. We hadn’t built software for real estate before. And then from going deeply into multifamily, we saw this opportunity around helping GPS raise more capital, do it faster, be more efficient, those sorts of things. There’s also this big overarching wave of more and more LPs getting involved in real estate, and I’m sure there’s many sponsors listening to this. It’s chaos. To get a deal done, you need to finally I said lock it out, those sorts of things. But then chasing around. 5100 different LPs for 50. 100 grand checks using different tools within the CRM. It’s in. Hello sign.
Andy Crebar ([00:06:31]) – It’s. Have we got the Y yet? There’s just a lot of manual processes and workflows which ultimately prevent sponsors from working with broader audiences. Right Triangle, which is changing, which we can speak about in a moment. And we said, look, there’s lots of opportunity here to help us do this better, which ultimately help more LPs get access to the the great returns that private real estate can provide.
Sam Wilson ([00:06:53]) – Right? So so I and I wholly understand those those pains very, very well. And I think even correct me and this is why I want to hear this, because even. Even with the right systems in place, and I won’t name any names, but there’s we just launched our latest fund. And even with a fund administrator in place that is handling theoretically all of that investor onboarding and all those systems, it’s like, okay, hey, we’re going to pay you handsomely to take care of this. Even then, I’m still involved somewhere. Somehow there’s a hey, what about and this and wait.
Sam Wilson ([00:07:28]) – But there wasn’t a signature from a and it’s like, wow, Like this was supposed to be turnkey. So I feel like there’s there’s there’s no magic pill. But yet you’ve solved some of the major point pain points, I would think, in the system that you develop. So talk to me about those pain points and what you’ve done to overcome some of those, such as the ones you just mentioned, where it’s Hello signed. Oh, there’s this the I mean. Talk me through some of that.
Andy Crebar ([00:07:58]) – I’ll give you the the founder lands and then the real estate lens. So in building software for anyone, like it’s always building any business really to really understand your customer, like what are their pain points, how are they using it, those sorts of things. And when you find customers that are using five different tools, do the one thing you know, there’s generally opportunity there, which is like, okay, how can we build a better holistic solution for these individuals? In talking about all those different points, solutions and management? There’s definitely a lot to it, but that’s obviously the beauty of technology because you can automate a lot of this stuff.
Andy Crebar ([00:08:31]) – Real estate’s an incredible industry, but it’s often a slow moving industry and there’s a lot of wealth with, you know, traditional generations that are used to doing deals in a certain way and those sorts of things. I think that’s changing a lot. Now we’re seeing more and more syndicators, you know, target, you know, accredited investors or target retail scale really quickly. So we think that industry is evolving and being more receptive to adopt technology and do this stuff in new ways. For us, it’s really just about understand the customer. So we’d spent hundreds of hours with GPS watching them use existing tools and asking them, you know, what spreadsheets do you hate? Like, Oh, this spreadsheet always got to come back to this because this thing does that thing. But then you track it here and you’re like, okay, there’s an opportunity there. And when you hear enough of sponsors talk about the same spreadsheet that they’re using to solve a specific problem, it’s like, okay, there’s something there’s something that we can help them be more efficient on board, more capital and, you know, work with more investors.
Sam Wilson ([00:09:24]) – That makes that makes a heck of a lot of sense. Yeah. I mean, I’m sitting here as you’re talking, looking here at your website, and I think it’s really, really cool. But this would you categorize this as more than an investor portal? Because there’s lots of investor portals out there and it seems like there’s more to this than just that.
Andy Crebar ([00:09:45]) – But of course it’s more than an investor portal. We we differentiate across a number of different ways. One thing that you talk about Miami thinking a lot about recently is just the use of a CRM. There’s a lot of incredible systems out there, you know, HubSpot, ActiveCampaign, MailChimp, even all these sorts of things. And they’ve all got really powerful workflows. And 90% of syndicators we work with are using one of those systems. It’s really good for automated touch points, for sequences, for workflows, whatever it may be. But when we think about investor portals, a lot of these investor portals have actually built out their own CRM in it, and then it ends up having sponsors, having two databases of like, I’ve got Sam Smith over here, but actually Sally Smith here.
Andy Crebar ([00:10:26]) – And is that the same one that signed the subscription docs? And then reconciling those things. So one thing we’ve focused a ton on is actually building into existing CRM workflows. So sponsors that are managing a pipeline in HubSpot or ActiveCampaign or those sorts of things, as soon as they’re moved from stage to stage wide and automatically trigger this thing in flow to send out, you know, signature docs or those sorts of things and really just use one CRM as a source of truth best as having two. So things like that where we’re not so much focus on being another investor portal, but really differentiating around how can we do stuff differently or better for how sponsors are using technology differently. Right.
Sam Wilson ([00:11:02]) – No, you’re spot on. Correct. Because that’s I mean, even you know, I’m guilty of it. You just touched on a pain point. That’s a very, very present reality for me where it’s like, oh, hey, cool. I’m really glad that Andy signed up on our investor portal. But does that tie then back into and for us, it’s active campaign.
Sam Wilson ([00:11:18]) – Does that tie back into active campaign and are those two talking? The answer is probably not. And so and that’s that’s a loss. I mean, my gosh, if people sign up on the investor portal, but then there’s never a follow up sequence. If there’s never the, hey, by the way, email sent to me or investor relations or somebody else saying reach out to indie. Yeah. And we lost.
Andy Crebar ([00:11:41]) – Yeah, We see a lot of sponsors try and duct tape these things together with Zapier or other tools, but at the end of the day, you know, it can work If you’re managing 100 investors, we want to get to 1000 and do bigger and bigger deals and more and more deals ultimately need to move outside of your personal network of friends and family and attract new investors and nurture new investors. And for that, you need the best serums. And for that, you know, we want to be the investor portal that works with those best CRM seamlessly.
Sam Wilson ([00:12:04]) – Right. No, I think that’s really, really awesome.
Sam Wilson ([00:12:07]) – Yeah, man. I’m excited to take a demo here of of your product here at VP Flow. That’s pretty awesome. Let’s talk about the other side of this business because it’s one thing. It’s one thing for the guy selling shovels to tell you how great the shovel is. It’s another thing for the guy selling shovels to be using a shovel himself. Right. And so you’ve you have built another website and another capital raising platform online that is built off of your flow. Product. Is that right? Can you tell us about that?
Andy Crebar ([00:12:42]) – Yeah, that’s right. We are. We eat our own dogfood at honey bricks. We go.
Sam Wilson ([00:12:46]) – Like that.
Andy Crebar ([00:12:48]) – A crowdfunding platform built on Flo. And it’s something that they teach a lot in, um, you know, the venture backed technology community, which is like the faster you can start dog feeding your own product and actually be your own customer, you know, the better product you can build. So we, we do that ourselves. A honey bricks, everything at honey bricks Honey Wix.com, which is a crowdfunding platform for for multifamily syndications across the country.
Andy Crebar ([00:13:12]) – Everything there is running on Flo. So whether it’s onboarding investors, accreditation distributions, sending out shares, whatever it may be, that’s all using our software. And we’ve got a ton of learnings and things. We’re always going to be improving with the product, but it’s been great to actually use it ourselves. You know, we’ve done ten deals in the last 12 months. We’ve got a little over 3000 investors on the platform, you know, raising capital for great sponsors, but really just doing it ourselves and showing, you know, keep making the product better and showing that it does actually work.
Sam Wilson ([00:13:44]) – Right. No, I think that’s awesome. So tell me about Honey Bricks. I mean, so you guys are working with great sponsors around the country, but give me kind of the the and it is crowdfunding, but give me kind of more of a of a deeper dive into the product itself. Who’s investing on it, how you guys manage that? I mean, that’s that’s still it seems like even with a great CRM, there’s still a lot of moving parts into bringing a sponsor in, getting the deal vetted, getting it approved on the platform, getting investors in.
Sam Wilson ([00:14:13]) – I mean, there’s a lot of moving pieces there. How do you do all that?
Andy Crebar ([00:14:16]) – Uh, it’s quite simple once it’s up and running and then using technology. But obviously there are a lot of moving pieces, especially on the regulatory front as you outlined. Uh, but the value prop we provide to, you know, investors that find us and invest in honey bricks is really around three things. The first one that pretty vetted deals. You know there’s. Then it’s 2 million apartments across the US and prime buildings. You know, there’s thousands of syndications every month. We have a team that goes out and finds 100 of these every month and underwrites them ourselves, gets comfortable with the sponsor, the market, you know the deal. And then we’ll we’ll prove out these things and bring 1 to 2 to the marketplace that we truly believe in. And the second value prop is really around better terms. So these are a fund of funds where we’re investing in another operators deal. So they’re doing all the real work, you know, actually, you know, renovating the apartment building, finding it diligence and working with tenants, improving the asset, those sorts of things.
Andy Crebar ([00:15:10]) – So operationally, it’s quite an easy lift as far as managing these SPV entities. And the third one is we provide the options for secondary market liquidity after 12 months so investors can sell to other investors in the marketplace after 12 months separate from the deal. So the deal’s life lifecycle might be five years after 12 months if Sally wants to sell to Mary. Know they can do that through the platform.
Sam Wilson ([00:15:33]) – Wow. That’s really. Yeah. Solving the liquidity issue is pretty cool. How did how does that work? What is there a loss to the initial investor? Is there like how does what’s the liquidity options look like through honey bricks? Because that’s there has to be an exchange of value somewhere.
Andy Crebar ([00:15:53]) – Yeah, We we don’t provide, you know, valuation benchmarks. What we do provide is, you know, the issue price here’s what the preferred return value would be. Those sorts of things. But it’s really up to Sally and Mary. You know, they can post advertisements within the platform and they can, you know, negotiate if they want an anonymous basis.
Andy Crebar ([00:16:11]) – But we don’t set the price.
Sam Wilson ([00:16:13]) – Sure, sure. And so then they just swap out their position in that particular deal.
Andy Crebar ([00:16:19]) – Yeah, the particular entity because remember to fund the funds which are separate from the deal. So it doesn’t actually influence the the top deal. You know, it actually this influences the SPV with the investors money bricks in it.
Sam Wilson ([00:16:30]) – Right, right, right. No, that’s that’s really really So each of your deals on honey bricks is a separate SPV goes live and then investors get in on that. Talking about crowdfunding we’ve had some new legislation guess come through this has been recorded. August 8th, 2023. So tell me about that. You talk you told me a little bit about this off air and it’s some stuff that’s new, new news to me. Maybe I’m just two heads down. I don’t quite know. But give me give me some color on that and how that’s affecting what it is that we are doing.
Andy Crebar ([00:17:02]) – Yeah, it’s it’s interesting. It hasn’t made more noise, I guess, in the community because we saw it and we said like, that’s quite interesting.
Andy Crebar ([00:17:10]) – We knew it’s been coming for a while, but as far as how quickly it’s moving through, it has representatives in the Senate. It could be here within the 12 months. And what I’m talking about is the Equal Opportunity for Investors Act. Now, there’s a representative from Nebraska, Mike Flood, I think his name is, and he proposed something called the Equal Opportunity for Investor Act, which basically asks FINRa, the SEC, to approve a accreditation test. Right. So not not based off income or no net worth, but an actual test that people that are financially sophisticated can take and then become accredited investors. And why that’s interesting is that the approval in the House of Representatives was overwhelmingly positive. It’s like 300 to 20 or whatever, whatever it is. And it seems to be moving pretty quickly. It’s getting to the Senate. And given that overwhelming response, it’s likely it’ll get approved quickly by the Senate. So as part of that legislation, they need a test within the next 12 months. So if you work backwards from that and say it takes a few months to get through Senate, it could be with us by the end of 2024.
Andy Crebar ([00:18:09]) – And why that’s important is. If you believe people do not invest in this stuff. And you know, at honey bricks, we only work with accredited investors and we probably get seven out of ten people that want to invest in honey bricks and not accredited, which we politely have to say, sorry, deregulation, we can’t work with you just yet. But I think there’s a huge market here in the US around non-accredited today. Investors that want to invest in private real estate, they’re not sick of the stock market volatility. They want to invest in stuff they understand generate double digit returns. They can’t do it. So I think that’s a really key piece of legislation that’s changing. It’s going to be a big change in the amount of capital that’s available in private real estate deals.
Sam Wilson ([00:18:48]) – Oh, man. And the number of people that are highly intelligent, very capable of making these decisions, and yet they can’t because they don’t meet an income or net worth requirements. Like that’s the people that need to be in these deals anyway.
Sam Wilson ([00:19:03]) – Like mean think about friends of mine that are, you know, they’re judges, they’re lawyers maybe. I mean, it’s like, you know, they’re not making half $1 million a year, but they’re very smart people. It’s like, how? Okay, but you don’t meet the accredited investor requirement. This is silly for sure. So yeah.
Andy Crebar ([00:19:21]) – A lot of benefits with it, you know, think it’s there for a reason. But think you’re right, there’s many very smart, financially savvy people that can want to invest in these deals and could invest in these deals but can’t due to the legislation. So that’s great to see.
Sam Wilson ([00:19:36]) – Yeah, absolutely. Absolutely. Yeah. This is this is fun. I’m glad to see your state on the front end of these changes. I mean, getting honey bricks out there, taking advantage of the crowd, funding legislations and laws, then building flow and and making honey bricks run off of it. I mean, those are all very, very cool things. And you love what you’re doing here in the real estate space and how you’re really bringing new products to the market that are meaningful and making a difference.
Sam Wilson ([00:20:02]) – So certainly appreciate that. If our listeners want to get in touch with you or learn more about you, what is the best way to do that?
Andy Crebar ([00:20:08]) – We show up there or sponsor or fund a funds manager head to GP flow. Com. You can learn more about what we do and how we help GP’s there. If you’re an LP looking to invest in high quality multifamily deals across the US. Check out honey bricks.com. And either way you can always find me and andy@flo.com as well.
Sam Wilson ([00:20:27]) – Fantastic Andy at flow honey bricks and flow. Make sure we include all of those there in the show notes. Andy thank you again for coming on today. I do.
Sam Wilson ([00:20:36]) – Appreciate it.
Andy Crebar ([00:20:38]) – Right on. Thanks for having me, Sam.
Sam Wilson ([00:20:39]) – Hey, thanks for listening.
Sam Wilson ([00:20:40]) – To the How to Scale Commercial Real Estate podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen. If you can do that for us, that would be a fantastic help to the show.
Sam Wilson ([00:20:56]) – It helps us both attract new listeners as well as rank higher on those directories. So appreciate you listening. Thanks so much and hope to catch you on the next episode.
