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Show Summary
In this conversation, Mark Vincent Fansler shares his extensive journey in the real estate and construction industry, detailing his transition from military service to becoming a successful entrepreneur with multiple vertically integrated companies. He discusses the importance of building a national brand, the nuances of commercial mixed-use developments, and the strategic advantages of vertical integration. Mark also highlights the appeal of Delaware for real estate investment and shares insights on raising capital and the significance of having a strong team to support business growth.
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Investor Fuel Show Transcript:
Mark Vincent Fansler (00:00)
Commercial mixed use specifically is made up of three or more occupancy types in the same venture, whether that’s vertical,integrated buildings or horizontally sprawling development,
the reason that’s important is because market takes cycles. You’ve seen housing cycles every eight or ten years. It takes a tank and that industry is shut down for a few years before it starts to come back.
Commercial mixed use is just the opposite where we tend to
recession proof or cycle proof because if you have retail office medical office condos all of that all in the same site if residential takes a tank retail office medical office is still strong the project still flourishes and you just keep going
Dylan Silver (02:14)
Hey folks, welcome back to the show. Today’s guest is based out of Wilmington, Delaware, where he runs several vertically integrated companies, including several real estate funds, National Real Estate Development Fund, a realty company covering both commercial and residential, a maintenance company, and even a steel building business. Please welcome Mark Vincent Fansler. Mark, welcome to the show.Mark Vincent Fansler (02:40)
Thank you for having me. I appreciate it, Dylan.Dylan Silver (02:43)
It’s great to have you on here. I always like to start off at the top, Mark, by asking folks how they got into the real estate space.Mark Vincent Fansler (02:52)
Yeah, sure. I got out of high school and went into the military and started in construction then. I spent the next 40 years working my way from construction into real estate.I had advanced to senior executive positions in the construction industry, left it and went into business into the real estate development industry in a corporate life and ended up senior vice presidents for some very large development companies and then retired in 2008. Since then, I’ve been doing it for myself.
Dylan Silver (03:22)
Walkme through the background. You mentioned military. Was family or friends that you had involved in real estate at that time?
Mark Vincent Fansler (03:30)
No, I’m the first of my kind in my family. Nobody in my family is into real estate.Dylan Silver (03:35)
So was it get out of the military and you said, well, hey, I was building homes and was having to construct in the military. So let me take this skill set. Or was it a little bit less direct than that?Mark Vincent Fansler (03:49)
No, it was just I always like working with my hands and building things. So, you know, I just sort of gravitated towards it. You know, I like building things and being able look back at it after years later and look at it, knew that I built it and it was still there and still in good position. Right. So I kind of liked having that, you know, gratification to be able look back at what I had done, you know, which is very different than where I am now. But yeah, that’s kind of just got started there and always had an inner drive that just pushed me to whatever was next. So I went from position to position.until I was running companies and now running my own.
Dylan Silver (04:22)
Seven vertically integrated companies. What was the first one of that stack?Mark Vincent Fansler (04:27)
That was Invencin Assets. We started out when I retired just doing very high-end custom homes and over the years it turned into a national brand where we do commercial commercial mixed-use real estate, land development, adaptive reuse, all that kind of stuff.Dylan Silver (04:43)
Walk me through building a national brand. I’m imagining multiple locations, large staff. What’s that process like? Or what was that process like?Mark Vincent Fansler (04:54)
It was an organic one because I didn’t set out to be a national brand. I certainly didn’t set out to own seven companies.But what came of it is that we marketed heavily for the acquisition of real estate around me. And that created a lot of relationships and that led me to other parts of the country. What I found is that not many people do what I do.
You know, there’s some very large corporations that do it, know, REITs and stuff like that. But from an individual investor standpoint, nobody was doing commercial mixed use projects. So it took me to places that other people wouldn’t go just because I had an appetite for things that were much more complicated than flipping homes or whatever.
Dylan Silver (06:09)
Right.What’s the spectrum of commercial mixed use?
Mark Vincent Fansler (06:30)
Yeah, you’ve…People talk loosely about commercial. Commercial can mean a lot of different things, but almost always they’re single occupancy. Meaning, if you go to one developer, they might do retail and that’s all they do. That’s one occupancy type. Somebody else might do office, somebody else medical office, somebody else will do, you know, restaurants or hotels. They’re all commercial, but they’re all single occupancy.
Commercial mixed use specifically is made up of three or more occupancy types in the same venture, whether that’s vertical,
integrated buildings or horizontally sprawling development, you’re going to have more than three occupancy types in the same venture. And the reason that’s important is because market takes cycles. You’ve seen housing cycles every eight or ten years. It takes a tank and that industry is shut down for a few years before it starts to come back. Well, if you’re only doing residential when that happens, your business is shut down and you struggle for a while until it starts to come back. Commercial mixed use is just the opposite where we tend to
recession proof or cycle proof because if you have retail office medical office condos all of that all in the same site if residential takes a tank retail office medical office is still strong the project still flourishes and you just keep going
you just pay less attention to the residential build out portion of it until it starts to come back but you’re still heavy in everything else
Dylan Silver (07:55)
And then the rentsare going to be much higher. They’re to command higher rents because it’s probably going to be considered a luxury area because you’ve got some high end restaurants. You’ve got the medical facilities. You’ve probably got retail, high end retail. You probably got sports retail as well in there. You’ve probably got nightlife. You’ve got morning life in there. So you’ve got your coffee shops. And so I can speak to where I was coming from when I was living in Texas just recently and lived in San Antonio, lived in Dallas.
Mark Vincent Fansler (08:17)
Exactly.Dylan Silver (08:25)
In San Antonio specifically, you’d see so many, I would say, subdivisions, really is what it felt like, but it was really a whole community built around apartment complexes, built around restaurants. And that’s what I think of when I think of commercial mixed use. I want to pivot. I want to pivot a bit here, Mark, and talk about vertically integrating and stacking other companies along to really facilitate the business of another. What was that?Mark Vincent Fansler (08:41)
That’s exactly right.Dylan Silver (08:55)
next company like and at what point did you realize hey we can start doing this not just for ourselves but for other people as well.Mark Vincent Fansler (09:02)
Yeah, it started out, it was just a product of, I was marketing to acquire real estate. And we would get a lot of leads in the midst of that, that just weren’t in my wheelhouse at the moment. I just let that, initially I let all that stuff die on the vine while I was just chasing investments to acquire. And then I started to track just how much of that I was letting go. And the numbers were staggering.So I put teams together around different pieces and when they became profitable, I built companies around them. So I’ll give you an example. For every one commercial mixed use venture that’s worth putting time and effort in, for my efforts to acquire the real estate, I found that I was letting go eight to 12 retail related leads, meaning I could have represented to sale or buy for someone. And we weren’t doing that.
I found that I was getting eight to 10 management leads
that had I paid more attention at the beginning, I could have been managing a lot of those properties for them because I was doing it for myself already, right?
Dylan Silver (10:41)
Right.Mark Vincent Fansler (10:42)
So I had the realty licenses and everything and I was doing all that stuff internally for my own ventures. I just hadn’t paid any attention to what it could do if I opened a possibility up to doing more than just that for myself. So when I started tracking those numbers, it became painfully obvious that I was letting a ridiculous amount of money go. So I started to build teams around those opportunities so that if we can make it profitable, they immediately became profitable. built companies around them and they’ve thrived as a result.Dylan Silver (11:12)
I think it’s interesting talking about the brokerage side of things because I’m an investor mindset first, real estate agent second. And I got my license really not sure if I was gonna use it the way that everyone else might think about, know, representing sellers, finding maybe first time buyers and helping them get into homes. But I knew that I had a passion for wholesale, which is the background that I came from. And that I felt like this was the next step for me. And what’s interesting aboutthe overlap between investing and brokerage is that to your point Mark, and as you’ve seen, there’s so many deals where you think, well, this isn’t really gonna be a great listing, it’s so heavily distressed. Well then, comes an investor who’s gonna buy that deal or maybe another vertical integration within your stack buys that deal.
Mark Vincent Fansler (12:03)
Right, that’s exactly what happens. So for us, it all comes from the marketing from the investment side. The marketing company that I have, we market to a half million properties a month, literally.We’re hitting them with emails, mean emails, texts, letters, postcards, picking up the phone and calling them. I have a team of people that do nothing but call all day long. And we’re putting billboards and all that stuff up in the areas. And those leaves just, they come in at a rapid rate. And initially I was only focused on the stuff I could buy. And I didn’t pay attention at first to how much of it I was really letting go.
Dylan Silver (12:39)
I wanna pivot a bit here and talk about one of the niches that you’re involved in, a steel building business. So this is another area, this is big construction. So I’m imagining this is for the commercial builds.Mark Vincent Fansler (12:50)
Yeah, and we focus heavily on commercial mixed use in general. I do do some residential stuff. I have a residential team that represents residential people, but we are historically a commercial company that does multiple occupancy stuff. So I bought the steel company for one purpose. It wasn’t even to sell lead, to sell product to. It was to build my own product at cost. So I bought the company with the intent to be able to save money on my own ventures.But it turned into a whole other thing once I got a hold of it.
Dylan Silver (13:22)
New builds right now everywhere seems to be the way to go. New build seems to be the way to go. I’m curious to get your perspective in the commercial mixed use space because of course deal time frame is not the same thing as flipping a single family home right. You’re dealing with municipalities you’re dealing with so many different moving pieces. When you think about the new build space in mixed use commercial and someone may be thinking wellMark Vincent Fansler (13:40)
Not even close.Dylan Silver (13:52)
What’s the typical timeline for a deal in mixed use commercial? What’s your general feedback for them?Mark Vincent Fansler (13:58)
It depends a little bit on the venture. So let me give you an example. If I’m buying a building that’s already up and I’m just doing an adaptive reuse, mostYou have to go through a little bit of a zoning for the intended use on the back end, but the entrances and building and everything is already there. So you save a punch of time there. We can generally get them done and approved permit ready in 12 to 18 months. But these are large jobs. These are taking existing hospitals and turning them from hospitals into something else. The things that are land development deals, if they’re already zoned commercial, they can take a couple of years. If they’re not zoned commercial, they can take three to five.
Dylan Silver (14:28)
Right.Mark Vincent Fansler (14:37)
to break ground.Dylan Silver (14:39)
I wanna ask you about that process. So three to five years, there’s gonna be all kinds of holding costs involved in there. When you’re looking at these deals and you’re underwriting them, the difference between three years and five years is two years, right? So how do you factor that into the arithmetic?Mark Vincent Fansler (14:55)
It’s all in the terms that you put the deal under contract. I don’t close on anything until I get irrevocable approvals.So my only true cost to carry is the soft cost to get the approvals and the cost of the money that I put into the deposits or escalating deposits over time. I am not closing on the real estate and carrying the note for a period of time. I’m closing on the properties when I have irrevocable approvals, which means
Everything that I need to start the job is done including the approvals for the permits. I close on the property in the morning. I go down and pay for the permit in the afternoon. Contracts and everything are already in place for the team to start. They’re on site doing construction the next day. That’s how we close.
Dylan Silver (16:20)
Iwant to pivot and ask you, unrelated to this conversation and where we’ve been going, I want to ask you about Delaware. I’m actually a big fan of Delaware. I grew up in northern New Jersey, lived in Texas. Now I actually live out of the country in Santo Domingo in the Dominican Republic. But Delaware is an affordable place, also a place where a lot of businesses love to go because they’re very favorable for business. But sometimes when we think about real estate investing, people…
Mark Vincent Fansler (16:27)
Sure.Nice.
Dylan Silver (16:48)
pivot to Texas, they might look at Florida. I’ve heard a lot about the Carolinas. Is there a lot of interest right now in Delaware from people maybe outside of the state?Mark Vincent Fansler (16:59)
Yeah, there is. Delaware has a lot of good things to it. There’s not a huge nightlife. There’s not a ton of stuff to do here, but it’s close to everything. So investors from all over the countryinvest in Delaware for a number of reasons. One, there’s no sales tax. Two, the property taxes are ridiculously affordable in comparison to the states that are around us. So you can buy a relatively affordable property, get decent market rate rents or leasing out of it, and it will pay for itself. And it’s not an expensive property to hold generally. But Delaware in general is within two and a half hours of nearly every Northeastern major metropolitan by train.
You can hop on a train here and be in Baltimore or DC. You can be in Atlantic City. You can be in Philadelphia, Trenton, New York, Boston, all within two and a half hours. So it’s a very convenient place to be. If you want to invest and live here and still have a reasonable access to the life you like to have, you can have that here.
Dylan Silver (18:05)
I wanna ask you a separate question about raising capital. I know that you’re involved in multiple different funds, National Real Estate Development Fund, and several others. When people talk about raising capital, oftentimes people think, well, I’ve gotta have this extensive background, know, and Wall Street, and I really have to know X, Y, and Z. What was your experience in building blocks to help you become an expert, really, in raising capital?Mark Vincent Fansler (18:34)
Well, I came from an industry where that was part of my expectation, part of my responsibility in my corporate life. So I already had a pretty good head start on it. But in general, for most people starting it,on either end, whether you’re the one providing the capital or the one needing the capital, it can be done at a very small level and you just build trust over time and it grows into a bigger thing, right? So somebody can be a private lender. If they have a hundred plus thousand dollars or if they’re a credit lender and they have $250,000 in liquid assets that is not part of their primary residence, they can just lend money and learn how to develop and invest in real estate as a result of being involved in a project that they helped fund.
So they can make decent money on their returns, it’s collateralized by the asset, so it’s very low risk. And if something goes wrong, you can take the asset and sell it in your collateral, and the real estate gives you your money back. You just have to do it with somebody who knows what they’re doing, who’s not ever leveraging their property. We’re never leveraging more than 70 % of a deal to begin with. So a lot has to go wrong for me.
If something goes horribly wrong, I can sell a property at a fire sale at 70 % of its value and still make all of my investors whole. I might be out money, but my investors have never lost money.
Dylan Silver (19:53)
Mark, I wanna ⁓ ask you before we are coming up on time here, I wanna ask you about how these vertically integrated companies over time have really adapted and also how they’ve grown. Because I think a lot of people, when they think about all these things, they think, well, if I had one that was successful, it would be great, but seven seems like a daunting task. As ⁓ someone who’s involved in all of these spaces, what’s your advice to folks if they may be, let’s say, working on their second integration fromreal estate brokers to property management.
Mark Vincent Fansler (20:26)
It comes to the team around you, right? I can’t do all this myself, obviously. I got great people around me, hugely talented. We just all have the same mindset. We know where we’re headed. We know what’s next. We’ll do whatever it takes to be successful. And when something happens, like I ended up in a hospital a week and a half ago, and my companies didn’t miss a beat, that tells you that my company and my team is set up in a way that I don’t have to be here for it to be operational and successful. So you really have to spend time.not just vetting the deal you want to invest in, but the people that you’re going to have run it. Like I run the companies from a corporate level, right? And if I need to get involved in a particular company or a particular deal, I have the knowledge and the will and the mindset to be able to jump in and do it and show and train and teach so that I don’t need to be there again the next time, right? But in general, I have great people running each of these companies and I run my companies through these people.
Dylan Silver (21:22)
Mark, we are coming up on time here. Where can folks go if maybe they’ve got a commercial deal they’d like you to take a look at or if maybe they’re interested in investing with you?Mark Vincent Fansler (21:34)
Yeah, that’s easy. You can just Google me at Mark Vincent Fansler. And that last name is F-A-N-S-L-E-R, Fansler.I am everywhere. All I gotta do is get on any one of the sites, shoot me an email, pick up the phone and call me. My team will gladly take the call. We’re obviously in a capital call all the time. We’re raising capital nonstop. We have 13 projects right now that range from four or five million dollars to 60, 70 million dollar first phase. And I got 13 of them going on. So you can imagine the amount of capital that we need to raise at a given time is pretty serious. So we’re always open to hearing from folks who are interested in putting some money to work with somebody who’s got to.
they’re act together.
Dylan Silver (22:15)
Mark, thank you so much for coming on the show here today.Mark Vincent Fansler (22:19)
I appreciate you having me, Dylan.
