#339 - Simon Wagner - Founder @ Granite Oak - Compounding $1M to $250M in 10 years
Feb 22, 2024
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Simon Wagner shares his journey from Morgan Stanley to founding Granite Oak, focusing on mortgage-backed securities, commercial mortgage thesis, Irish real estate market, planning & entitlements. Delve into Ireland's housing shortages, fundraising, and the challenges in European housing development.
01:22:40
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Quick takeaways
Investment strategy focused on low downside and high upside potential for great returns.
RE Cost Seg helps reduce tax expenses for real estate investors through cost segregation studies.
Importance of impressive pitch decks for successful fundraising efforts highlighted; Better Pitch recommended for top-quality materials.
Deep dives
Investment Approach and Insights
The speaker discussed an investment strategy where the focus was on leveraging opportunities with low downsides and high upside potential. By investing in bonds that offered significant returns unless the whole investment collapsed in the near future, they could secure their initial investment and capitalize on the free upside. This approach emphasized the importance of having a strong free upside component for achieving great returns in investments.
Real Estate CosSEG's Value Proposition
A company named RE CosSEG was introduced, highlighting its mission to assist real estate investors in reducing tax expenses through cost segregation studies. These studies enable property owners to accelerate depreciation and reduce taxes, resulting in more available cash for reinvestment or distribution to investors. The company's expertise in this specialized field, use of engineers for studies, and significant tax savings for clients were emphasized.
Pitch Deck Creation with Better Pitch
The speaker shared their enthusiasm for raising capital and the importance of having impressive pitch decks for successful fundraising efforts. They highlighted the challenges in creating impactful presentations and recommended Better Pitch as a company that excelled in producing top-quality pitch materials. The service offered customizable and visually appealing pitch decks, essential for attracting investors and conveying credibility.
Building Fort Capital and Investment Strategy Evolution
The podcast delved into the growth of Fort Capital, a real estate enterprise focused on becoming a premier real estate operator worldwide. The company emphasized efficiency through technology, customer service enhancements, and data utilization for optimal operations. The speaker detailed their investment focus on Class B industrial real estate since 2016 and highlighted the company's progress, advanced technology, job opportunities, and engagement channels like newsletters and LinkedIn for further insights.
Overview of Property Purchase and Strategy
Property purchases often involve complex financial situations where owners may neglect property maintenance due to financial distress. Strategies employed by some owners include placing undesirable tenants for short-term cash gains. Over time, addressing issues like tenant management and property upkeep can significantly improve property value and rental income. Additionally, obtaining planning permissions for further property development enhances the overall property portfolio.
Housing Market Challenges in Ireland
The housing market in Ireland faced a decade-long stagnation in development despite population growth, leading to a severe housing shortage. Factors like intricate planning processes, bureaucratic challenges, and public objections contribute to delays and complications in property development. Government intervention aims to streamline planning processes and incentivize housing projects to address the persistent housing shortage and boost market activity.
Simon Wagner is the Founder and Managing Partner of Granite Oak, a private investment firm with over $250mm of assets across Real Estate and Venture Capital. His career spans more than 20 years of investing and entrepreneurship in financial markets and alternative investments.
On this episode, Chris and Simon discuss:
Working in mortgage-backed securities at Morgan Stanley in 2006