How Will Curtis Uses AI to Underwrite 25+ Commercial Deals in Minutes

Steven Weinstock (00:00) Hi, everyone, and welcome back to another episode of The Wealth Clock with Steven Weinstock. I'm your host. I've been investing in real estate for almost 25 years, started buying single family homes, multifamily properties, and recently launched a debt credit fund to invest in first lien position mortgages. Today we have Will Curtis. He's a principal at Cross Sabres Asset Management. But before we get to him, We do have a sponsor. The sponsor is Cable NOI. NOI stands for Net Operating Income. If you have a building with 20 units plus, you are leaving some money on the table. There are cable companies, Spectrum, Charter, Time Warner, AT&T, that will pay you without having to talk to your tenants, without having to wire any new wiring. They'll pay you a per door fee and they will give you an ongoing revenue. All you have to do is sign up. It does not cost anything. There is no obligation on your end. Please reach out to cablenoi.com and let them know that you found out from this podcast. Will Curtis, thank you so much for joining me. I appreciate it. Will Curtis, CCIM, CPM (01:13) Yeah, Steven, thank you so much for the invite to join you. Steven Weinstock (01:15) Okay, so I know you are a commercial real estate advisor, a CCIM instructor. You'll tell us what that is. You are a national speaker who's brought institutional level thinking to everyday investment and operational decisions. Will, tell us about your first job. Will Curtis, CCIM, CPM (01:34) My first job, know, very, very starting off, I rolled silverware at a small restaurant. If you want to go all the way back, you know, I think I was 13, 14. Mom was a waitress. They needed somebody to roll silverware. The waitresses tipped me out. And, you know, I think every other, every other Sunday I was there and, you know, making, you know, 30, 40 bucks a week. And for a, you know, for a 13, 14 year old kid, that was, that was good money. Steven Weinstock (01:58) How'd you get into the real estate business? Will Curtis, CCIM, CPM (02:00) Honestly, a long road. I did about six and half or so years in the military. While I was in the military, had somebody called our command financial specialist. Their job typically is to tell the new soldier not to go buy a Camaro for 36% interest rate, not to go and bounce checks. Basic financial literacy. He had come in and started talking about his real estate investments and what he was doing. It was really more of a plan for retirement. It really was a rich dad, poor dad-esque type presentation and sitting there as a young private making all of like $1,300 a month he was talking about him with at the end of his career making more in his real estate investments than he was as an E6 with 20 plus years of service to military and I was like well he's a normal guy. Maybe that's the path I want to go down. That's ultimately what got me looking at real estate and the plan was to be a house flipper. I didn't realize there was anything other than selling houses or flipping houses. No idea there was more than that. And luckily for me, I decided I wanted to go be the smartest house flipper I could. Went to go get a degree after I got out of the military. Went to go get a degree in real estate finance development and quickly learned real estate was so, so, so much more and found myself kind of picked up and hired into a small family office from Fraternity Brother and that was it. I was doing commercial property management and commercial brokerage kind of ever since then. Steven Weinstock (03:25) Wow, so you had a advisor in the military that really guided your career. I wish we had these advisors in high schools throughout the country. It would really make all the difference, not necessarily specifically real estate, but just a teacher or an advisor telling you not to buy that Camaro at 36% interest. That's really amazing. It's a shame we don't have that throughout the high schools. Will Curtis, CCIM, CPM (03:49) Absolutely, and unfortunately in the military, you get people that come from all sorts of backgrounds, especially those that are impoverished where making $30,000 a year is more money than that family has ever made, even with them growing up. So you have people in those situations who have literally no financial training, no type of just kind good common sense when it comes to kind financial well-being. Steven Weinstock (04:12) So as someone myself who's into multifamily properties, the word commercial real estate is sort of ambiguous. Some people say or think it's just retail or office space. Some people call multifamily residential. When you say commercial real estate, are you involved in multifamily or are you dealing with apartments or are you office, retail, warehousing. Will Curtis, CCIM, CPM (04:39) Yeah, I think most of my career has found me more on the office retail industrial side of the house. We've done a couple of things here and there with multifamily, but with really any specialization, whether it's office multifamily retail, there's some nuances that you know if you're going to be really good at what you do, you stay laser focused in that area. So while we've done a little bit of multifamily here and there, definitely not my strong suit. More office and industrial have been my bread and butter through both my career. Steven Weinstock (05:07) What drew you specifically to that part of the business as opposed to residential? Will Curtis, CCIM, CPM (05:13) I hate to say it that way. The small property, the small family office I started with, they were basically in everything from office buildings, industrial retail. And when they decided to sell their portfolio and move to Houston, I still wanted to stay in San Antonio. And honestly, the first company that hired me was a medical office REIT. So I got lucky to kind of get thrown into medical office, kind of forced to specialize inside of medical office. And from there, you know, I spent the better part of my career in kind of the medical office space. And from there, that's what I knew. It was easy to go from medical office to office and then office into industrial and a little bit of retail here and there. Doctors want to have the retail, dock of the box type locations as well. So really kind of found that office was that fundamental and multifamily, not having the knowledge scares me a little bit. Steven Weinstock (06:03) Yeah, as someone like myself who specializes in residential and apartments, and I've dabbled in office and some retail, the property management side on the residential is, in my opinion, much tougher. You're dealing with people who, you know, this is their home. There's more emotions involved. When it comes to some of the office and retail that I deal with, the property management seems just a little less stressful on my end. What was your first commercial deal or advisory role like? Will Curtis, CCIM, CPM (06:37) Man, the very first one. Going back, if I can remember the exact first one, I was a landlord rep and we had a water purifying company. San Antonio's got some hard water and some issues with the water quality here. So pretty common is to have these water purifications. They fill up the big five gallon jug and you go from there. So that was one of the first ones we did. And that was interesting to kind of dive into because one, I had no idea what I was doing. I just kind of thrown the wolves like many of us were. Their build out was pretty extensive. They had a reverse osmosis systems that have pumped water in. We had to look at how do you build back water separately on a building that way. So a lot of it was kind of getting some guidance from the owner. But again, a lot of it was kind of going out there and learning on my own. It was overall a great transaction. I think she's still there to this day, 20 odd years later. So it's been a relatively good deal for her, but it was definitely interesting with the complexity of the equipment, everything I had to move in and then how that really impacted and because they're using so much water impacted the other tenants in and around the building. Steven Weinstock (07:41) A lot of podcasts and lot of videos out there on the internet love to talk about some of the wins. I like to talk about some mistakes. Any early mistakes you could tell me about and maybe some lessons you learned? Will Curtis, CCIM, CPM (07:55) We could fill the entire episode with mistakes. I think early on, one of the biggest mistakes I didn't do was I chased everything that I thought could make me money. And it really came from a scarcity mindset was I didn't think I'd have anything. So I was doing residential sales, I was doing apartment locating, I was doing commercial management and brokerage, like anything I thought I could make some money at. And for about the first three years, I chased anything that was shiny. And I realized in about three years, I knew nothing. I was more or less worthless. If somebody got brought me in, I couldn't compete because I was really splitting my time between everything. And to me, that was one of the biggest mistakes. I know when I was kind of forced to jump into medical office, learn medical office, from there, my career really kind of just jumped ahead and went kind of gangbusters after that. Able to get some of the education of those things, which I think helped kind of guide me in there. But ultimately, I think just not having a specialization and not focusing on something. And that goes into, I think the other thing that I think I screwed up and maybe still kind of not do as great of a job at is really mentorship. Throughout my career, I don't think I've had a good solid mentor. I've had a few people that have mentored, not somebody who's been consistently kind of in my corner, kind of coaching me, mentoring through that. And I think that really hurt early on and counterparts that I know that kind of came into the industry around the same time I did that had that, I've done very different career than what I've done. Steven Weinstock (09:20) Yeah, you mentioned mentorship, especially on the residential side and with new investors who typically start out either on the fix and flips or buying single family homes. There's not a lot of mentorship going on early on. And in my opinion, the reason being is that we feel, and I'm guilty of this, and we feel that we are it. We are the secret sauce. We don't need anybody. Maybe we need a good mortgage broker. Maybe a good realtor, but it's very hard to, I guess, be vulnerable and speak to others in the industry. Maybe you're afraid of competition. You're afraid of divulging secrets. And I found in real estate, there's not a lot of competition. And when I say that, there's so many local markets. There must be 400 local markets. So the chance of the person you're speaking to going to bid on the exact property that you're bidding on at that time is really not likely. So having that mentor or somebody that you could speak to definitely is pretty amazing. Joining these real estate groups, which I did early on after some failures, really opened up a lot of doors for me. You see a lot of investors. What separates the good ones from the average ones? Will Curtis, CCIM, CPM (10:46) Yeah, I think what really separates good investors from those that are maybe not so great really comes down to kind of planning and understanding. Given what I did, especially with the REIT that I worked for, I became the manager acquisitions and dispositions for lack of better terms. In that role, we were looking at hundreds of properties a year, if not maybe up to thousand properties a year and underwriting things literally daily. One of the things that we realized very quickly was that the deals that we could manage and we could operate successfully were the ones that were going to be great for us. The ones that had issues with operations, the ones that didn't mesh with our operational style was the ones that despite being great on paper, never really made us the money that we had hoped for. So I think if you're looking at an investor coming in, it's not just the numbers on the spreadsheet. Anybody can fill out the spreadsheet and make it look like it's an amazing deal. But really sitting down and understanding how the building operates, what those expenses are really going to be and not really kind of fluffing up the numbers or making yourself sound good or feel better because the investment. I'd much rather know I'm coming into investment that's going to struggle and then I got to turn that around rather than thinking this is going to be peachy and it's all going to be great and ignore all the things I'm going to struggle with and that's what I think we see a lot of investors just not pay attention to operations which at the end of the day that's what's going to make you money that's what's going to ultimately create the value or not for you in that property. Steven Weinstock (12:09) You mentioned you're in Texas. Do you manage your own property elsewhere or is it just in your local market? Will Curtis, CCIM, CPM (12:16) Right now, it's just in our local market. We used to practice nationwide, but most of our focus now is really just here in the local market. Steven Weinstock (12:24) Have you ever thought about expanding into other markets? Will Curtis, CCIM, CPM (12:27) We were open to it. We've looked at it as well. A lot of it comes down to kind of center gravity where you've got folks and if you've got enough quality talent in an area. So as we would grow, we'd have to be large enough for us to make sense, to get good quality talent. We put a lot of energy and effort into our team members. So we're training, we're investing in their future. We pay for things like CCIM and their certified property manager. We cover a lot of that so if we're going to be training and mentoring folks we want to make sure there's enough economies of scale for us to put somebody there and for them to ultimately find success in that market. Steven Weinstock (13:05) So your background is working with large institutional investors. You mentioned the medical REIT. How does a medical REIT differ from other large players or even smaller players in the market, especially being in the public markets? I assume when you say a medical REIT, we're talking a publicly traded company. How do they differ in their approach when it comes to buying? Will Curtis, CCIM, CPM (13:36) I think there's a few things and the first one, especially when you're publicly traded, you care what the dividend rate does, especially as a REIT. You care about stock price, you care what the dividend rate does. So even if you have good solid real estate investments. If it doesn't move the needle for that dividend rate or it changes that dividend rate too much, you make your decision with the lens of what's gonna happen to that dividend or what's gonna happen to that stock price. And it can be from a practitioner, it can be a little frustrating. You know, when you've got a great deal, you've lined up some great things and then the answer is no, because it's gonna impact the stock market too much. Okay, well, that's a different kind of viewpoint that can get a little frustrating. I will say from being on the inside of some of these that a lot of times we think these are these massively brilliant companies. They've got all these things going on. And to the extent many of them are highly educated, many of them have got a lot of tools and resources that the local investors don't have. But the one thing that I think holds them back a lot of times is honestly bureaucracy. They've got 18 checks and balances to go through where a local investor, it's either you, you talk to your spouse and you're good to go. You talk to your couple of partners and you're good to go. So it's not a bureaucratic process. In an afternoon, you can make a decision on what you're going to do relatively quickly where in that world, 15 people have got to sign off on it. And there's one property I can remember specifically was inside the institutional space, you don't want to deviate too far because if that deviation fails, that's your job on the line. We had a property in upstate New York. Hospital system left. I basically said, let's go ahead and lease this up as general office space. There's enough general office demand. So obviously a few years ago, enough general office demand for us to go through here. Here's the broker we should bring in. Here's the play. Let's go do it. And we'll fill this up 18-24 months is what we should be able to fill it up for. And let's go ahead and sell the property off. And here's what we should make on it. So we bought the property at like six or eight million. If we filled it back up, we could have sold it for something like 10 or 11 million, decent little return on there. Instead, they said, that's not our wheelhouse, that's not what we do, let's go ahead and sell it, they sold it for four. And the person we sold it to literally walked in with the same broker that I said we should hire, executed the same plan that I said we should execute and turn around and bought that thing for four million dollars and sold it for 12 in about two years. And it's like, opportunities you or I as an investor, we'd jump on that all day long. That sounds like an amazing opportunity. Let's go ahead and shift a little bit. But in that institutional space, if it's outside of that lane, there's no creativity to get outside of that lane. Steven Weinstock (16:12) Tell me about the difference between asset management and property management. I think a lot of our viewers, most of them are new investors or non-investors trying to break into the market somehow. And they really don't understand the difference. Will Curtis, CCIM, CPM (16:28) And I think a lot of the industry doesn't understand the difference. As you start looking at the property management, it's generally gonna be thinking of boots on the ground, tenants, toilets, taking care of those things that's there. That's generally what property management is looking at. It's very tenant focused or maybe sometimes expense focused on making sure we manage the expenses. As you start looking at asset management, it's almost taking a little bit of a step back and a bigger picture. You're still maybe doing the tenants and toilets and those things, or you're hiring a property management firm to do that. But you're also looking at what are things that you can do to drive revenue? What are things that ultimately can help reduce cost across the portfolio? And then looking at things like the lending market and those things, whereas property management, very focused day to day activities. And asset management almost steps back a step and looks at it from there. And even if you look at kind of most corporate real estates or very formalized real estate groups, you start off as a property manager and then some of them will, as you promote, you move into from a property manager into an asset manager. Some firms will call that asset manager a general manager. You're still kind of managing properties, but you'll notice that change a little bit there. And ultimately your picture becomes bigger with asset management and you're looking at the overall financial health rather than day-to-day operations. Steven Weinstock (17:45) Institutional investors, what does institutional mean in practice? Does that mean the size of your portfolio, the size of your checkbook? Talk to me what institutional means. Will Curtis, CCIM, CPM (17:55) Yeah, I think it's a little bit of both. I think a lot of times when it comes to it's, I think we're more aware where your capital comes from. So more of our institutional folks are doing some type of raising of funds. It's coming from some publicly traded entity. It's coming from PE firms or something along those lines. And then at that point, we're also looking at the larger dollar amounts as well. And their investment criteria is a little bit different. Most institutional real estate firms are looking at slow, steady, long-term returns. Buying something at a three, four cap is completely okay to them because they're looking for long-term, steady returns. Whereas I think many of our smaller investors, we're looking at something maybe at a nine, 10, 12, 15, 35 cap. I mean, it'd be an ugly property at 35, right? But we're looking at something along those lines because we're willing to make that risk because we're trying to grow, trying to grow that portfolio. Because we don't have that institutional money. We don't have a lot of that back end money that's just trying to pay the pension fund when it actually comes out or pay the insurance premium when they actually got to do a payout there. Their motivations are completely different. Steven Weinstock (18:57) What corners do individuals cut that an institution never would? Will Curtis, CCIM, CPM (19:03) That's a good question. I think the institutional folks are going to be deep diving into just about everything and they're gonna micromanage every aspect of the due diligence and the transaction. With some local investors, I think that gets thrown to the side a little bit, even as we're working deals and I'm trying to advise, hey, here are the things we need to look at, that's fine, we'll get it figured out once we get the property. No, no, no, no, no. You probably wanna understand these liabilities, this is what's going on. So I think in the depth of research, especially due diligence process is one of the big things where ah, it's a cash deal, let's don't do an environmental. All right, well, let's hope there's nothing environmentally dangerous there. And we've seen that happen as well. The property next door had issues, and now your property has issues, but you bought it cash and you wanted to save money on the due diligence and not jump in. So there are things that will come up like that. I really think the big difference is paying attention to due diligence and not skipping those steps to making sure you are maybe not mitigating all the risk, but at least understanding all the risks that you have going into that property. Steven Weinstock (20:09) Do institutional investors ever buy properties in cash? Will Curtis, CCIM, CPM (20:12) Yeah, a lot of your REITs will. And that's one of the things that gets a little more unique with REITs because they're being publicly traded. They really don't use a lot of debt. And even for me, kind in my career, I forgot that debt was even something to really take a look at because most of the deals we did across my career had nothing to do with the debt markets. As a matter of fact, I remember coming out of the REIT, going to my first deal, and they were asking me to make sure we got an S&DA. And I was like, what is that? They're like, how do you not know what? I haven't dealt with loans. I haven't had bank requirements on top of loans whatsoever. So it really kind of threw me off because we just hadn't done deals that way. So absolutely a lot of them will come in with cash. They're reducing that risk of the loan side of things. But they still do that same level of due diligence because it is publicly traded or because they do have a lot of other people's money involved. And they're going to go through those additional steps just so they keep their investor confidence high. Steven Weinstock (21:08) As a REIT, is there a requirement or a limited requirement on debt that can be placed on property? Will Curtis, CCIM, CPM (21:15) That's a good question. I don't know if there is or isn't. I never got into that side of it. We were really just transactional. I would imagine maybe not, but my guess would be it's going to be what your investors would ultimately be comfortable with and how do you keep your investors feeling confident in your abilities. Steven Weinstock (21:33) Interesting. When it comes to public markets, the stock price is sometimes or a lot of times affected by external factors that are not necessarily pertinent to the actual company and the operations. How do REITs handle that? Meaning they're doing well, rent is collected, everything is rock and rolling. And because of some war going on 6,000 miles away or because of some other issue, all of a sudden the markets are down and now my REIT or my investment in this REIT is down. How do you guys deal with that stuff? Will Curtis, CCIM, CPM (22:11) So I think the struggle with that is you can't control those externalities, right? They are what they are and you just have to kind of roll with the market how you roll with it. The one thing that as a REIT you can for the most part control is what that dividend rate's gonna be. If you promise you're paying six bucks, eight bucks, whatever it is, as long as you hit that dividend rate every single time, that's the most control you have. And even if you have those externalities that are there, the analysts when they sit down and look, if you say I'm going to pay eight bucks, if you come in at seven dollars and 99 cents, you're close enough. You told us you hit what you're going to hit. You're a penny off. But all right, you're not bad. As long as you can hit as close as you can. That's what a lot of the analysts look at. And that's how they rate all that. Of course, you start getting kind of P.E. and all that fun stuff from the stock market side of it. But at the end of the day, that dividend rate is what you as the REIT can control. And as long as you can continue to show you can hit those dividend rates, that shows you're in control, that shows that the market doesn't matter because you've got a handle on what's going on and that you're able to do a great job and be a good steward of that money. Steven Weinstock (23:13) Talk to me about AI. What are you doing? Are you using AI? Are you just ChatGPT-ing some emails? Talk to me about AI and how you're using it and how it's affecting you. Will Curtis, CCIM, CPM (23:24) Yeah, so I can't spell so AI is reviewing every single email I send out for the most part. But when it comes to AI, a lot of what we're doing is really fine tuning a lot of that research that comes in. So as we look at an investment property, one of the things we're going to look at is, is there going to be sufficient demand for that area? Meaning is there gonna be enough tenants that are gonna come in? And what we'll sit down and do is we'll pull things like demographics and psychographics, toss those into AI and help AI build out what is the profile of a renter or what is the profile of the business that likely would fit into this building. And then is there, we'll take that next step, and is there enough demand from all that? So we have AI kind of front loading a lot of that research for us, even on the budget side, we're using AI to kind of give us our preliminary look at offering the rent. So let's say we need to hit whatever matrix we need to hit. We'll put five, six, eight OMs in there rather than us running through every one of them. Which ones rank the best, but given what we have, and we've noticed too with Claude for the most part, is it's just like another analyst. They're going to make some assumptions that I probably wouldn't make. I'm making assumptions they probably wouldn't make, but understanding it's just like it's another analyst. We're able to kind of fast track that. I had an owner who wanted to see the numbers on 25 of these properties, which one's best. I'm like, I'm not going to spend a week and a half underwriting 25 properties because he hadn't closed on anything as of yet. So we dropped that into Claude. Claude came back, said, here are the three best. I went line by line of those three, spent a half a day and sent him, here are the three best ones that we have there. And again, Claude's underwriting compared to mine was just like it was another analyst with slightly different assumptions that we're looking at from there. So we're using it all day, every day, not just clean up this email, write this email, but really diving into even marketing copy where we're sitting down and getting smarter with here are our avatars. Here's what our avatar wants. Here are the pain points. Here is the back channels of what they have responded to in the past. This has gotten us the good reactions. Let's create more content along these lines as well. So we use it every day before we jumped on this. I was running through some analysis on AI as well all day every day. Steven Weinstock (25:36) What do you do for fun outside of real estate? Will Curtis, CCIM, CPM (25:38) I've got two small kids, so there's nothing that's fun other than taking care of them. I'm more of an outdoorsman, so if I get a chance to go out, hunt, fish, hike, I'm taking that opportunity to go outside and do it. Of course, we're in the middle of the winter right now, so it's not nearly as fun as what it could be during the spring or the fall. But yeah, any opportunities I get to get outside, that's the opportunity I'm taking. Steven Weinstock (25:59) Are you watching any good TV or reading any good books lately? Will Curtis, CCIM, CPM (26:03) Yeah, so we started the Screwtape Letters again, which is by far my favorite book. It's a CS Lewis book and I love the story in there because the idea is it's basically two demons, the uncle of the demon, the nephew and they're writing letters back and forth through each other as he's going through his journey of becoming a new demon. And it's just fascinating how he kind of breaks down human nature and all that. So I've read that book probably 8000 times and I'm working on 8001. I just love the book and it's very self reflective. And I think CS Lewis was picking up on a lot of things that are just human nature and it's kind of transcended time. So we're rereading that one. When it comes to TV, we just finished up some of the Yellowstone stuff, the Landman, anything that's Landman, I was hoping a little more real estate, it's a little more drug dealer kind of story. But it was all right. I enjoyed it. It's been fun to watch. But yeah, those are kind of what we're working on right now. Steven Weinstock (27:02) Yeah, I enjoyed Yellowstone very much. And Landman, first season I loved, second season I sort of fell away from. But that's just me with TV. I'm usually like a one season type of guy. And I usually just either get bored or maybe the writing just gets worse. Will, thank you very much. Tell everybody in the audience, I'll put it in the show notes, but how they could reach out to you. Phone numbers, social media, whatever you want to share and we'll put it in there. Will Curtis, CCIM, CPM (27:29) Yeah, the easiest way to find me is going to be on social media. It's at Will Curtis CCIM and really anywhere you go, Instagram, LinkedIn, TikTok, wherever we're on all of them.