In this episode of the Closing Table, we’re joined by Laura Millichap, who is the Entrepreneur In Residence at Second Century Ventures.
Laura shares the importance of finding your niche, having the right people around you to be successful, and how you can’t learn commercial real estate from the books – you need to be willing to make mistakes.
What's Discussed
1:46 - Laura's real estate journey
2:38 - Laura in her first deal closing
3:57 - How Laura found her niche
5:02 - From underwriting deals to starting her own software company
9:31 - How Laura found her mentor
12:25 - Laura’s tip for advancing one’s career in real estate
13:58 - How’s Laura's work at Second Century Ventures
17:12 - Book collections of Laura
Transcription
Intro:
You are listening to the closing table by ProDeal, the Commercial Real Estate Industry Insiders podcast. Closing deals is what separates the good from the great in this business. That's why we pick the brains of the world's best lawyers, lenders, developers and brokers. With a reputation for getting the deal closed, stay tuned for insider tips on how to succeed at the closing table and bring your business to the top. Now let's start closing some deals. Welcome back to the Closing Table. I'm your host, Ian Group. And today I'm here with Laura Millichap. Laura has an extensive background in real estate. Her background includes origination brokerage, starting a software company and most recently, building a global corporate partnership program for the preeminent real estate venture fund, Second Century Ventures. Just a reminder that this podcast is brought to you by ProDeal, where we've created a simple way for deal teams to be better at organizing, sharing and tracking due diligence. At ProDeal, we work with some of the biggest and best lenders, sponsors and law firms. Use our simple tool that provides some big results. Now let's dive into today's conversation with Laura Millichap. Laura, great to have you on the closing table. Really appreciate you being here.
Laura Millichap:
Thank you for having me. I'm excited.
Ian Group:
So we know we've we've talked before and I definitely feel like I know you, but for our listeners would love for them to feel the same way. So could you introduce yourself and just let everybody know what your your background is in the real estate industry?
Laura Millichap:
Yeah. Hi, I am Laura Millichap, and I was born into commercial real estate. So for those of you who wonder my last name is my last name. My dad was Bill Millichap, but I never worked for a Marcus & Millichap company. I stayed in Switzerland and ended up on the data side and then mortgage banking, mortgage brokerage, and then started a commercial real estate software company. And now I'm in the venture space helping startups. So kind of a weird arc with a little bit of everything in there.
Ian Group:
Very diverse. And I'm curious, I like to ask everybody this, but do you if you go back all the way to when you were beginning your career in real estate, do you remember your first deal closing?
Laura Millichap:
Oh, hell yeah.
Ian Group:
Okay, tell me more.
Laura Millichap:
So after the data stand is in data and you don't really feels closing, right? I ended up shadowing Brad Wilson at Marcus Millichap Cap Core. I was like interviewing for everything. I had moved back from Chicago to home to be closer to family here in the Bay Area. And I was literally going to career fairs, just going from like booth to booth to booth, interviewing like I interviewed for like a cemetery plot salesperson, like literally you name it. I was just literally walking around talking to people and my dad was like, you know, you have this really weird amalgamation of traits, maybe you should look at mortgage brokerage. And so I shadowed Brad Wilson, who was at MM Cap Core, and he sat me down in front of some deals, showed me how to underwrite, and I was hooked. Like I loved it so much. It was like math lists making and like the yenta of pairing things together and it like satisfied every craving I had. And I was like, Here's all your underwriting done in like an hour. And he's like, Holy crap. I'm like, I'm coming back tomorrow. You got more for me? And I think it was I think it was like an apartment building in, like San Leandro was the first deal he sat me down in front of and everything just kind of clicked for me and I was hooked. I love I love it.
Ian Group:
Any lessons or mistakes or anything that you really took away from that.
Laura Millichap:
When you find your thing, if.
Ian Group:
So this. So it was your thing. You found your thing?
Laura Millichap
Yeah. I think, you know, it's so funny because you go to school and there's not really this link between school and life purpose. And, like, nobody really teaches you how to find your thing. It's not what they say. It's really and all like you go to school to learn in the U.S. how to take standardized tests.
Ian Group:
Right.
Laura Millichap:
Not be a jerk in class. Right. Like that's the litmus test. That's the bar we've set for the most part. And then you get out of school and you're just kind of lost. And I was that way until I sat down at a desk and started underwriting commercial real estate deals.
Ian Group:
That's awesome. Okay. So now you started a software company. Right. So I would love to know how you went from that. And then now you're you're in the in the venture space. So we'll get there. But how did you go from underwriting deals to creating software to help others with their deals?
Laura Millichap:
With a lot of help. You know, I spent ten years in banking, in mortgage making. I think no one has to spend that amount of time. But for me, coming from the background I came from, I think Gwyneth Paltrow just got railed for saying that kids that are famous, kids from parents have to work twice as hard. But there is a higher bar. I was expected to know things out of the gate that I didn't really know. And I was had tried to make a mistake and have it reflect poorly on my family. So I really spent a very long time and I started at the bottom, which I highly recommend to everyone. When you start in a grunt position and work your way up and you've literally done every crappy job known to man in industry, you have an innate understanding of the pain points and the arc of how things travel.
So I'm not an executive that hasn't taken out the garbage, right. And I think there's something really valuable in that because I really I mean, I literally started as like an assistant to Ingrid Marlow, who was one of the top producers at Washington Mutual and their multifamily group. And I did whatever she told me. Basically like whatever you need. You want your kids babysat. I don't care what it is. I showed up early. I was the last one to leave and I just worked my ass off because I wanted her job. And so I did that. And it turns out underwriting multifamily deals, once you've done it for a year, it's not a lot to learn. And I'm kind of a learner by nature. So I ended up leaving there and going to the Commercial Capital Bank, which was pretty fun because David DiPaolo ran it and he basically told me, Laurie, if you would lend your money, I'll lend ours. So as long as the underwriting made sense and then I got very lucky, I worked with two guys who kind of took me under their wing, who were other sales producers there, and they taught me how to underwrite the rest of commercial. So I learned how to underwrite office, industrial, retail, kind of everything else. At one point I think I looked at a marina, right? So you kind of learn all the rest. And then they got acquired by Washington Mutual a year later, and then I didn't want to go back to work and be pigeonholed, so I ended up going to what is now Slack Capital, which is a phenomenal mortgage banking group.
And Dan was I mean, Dan, I think the sun rises and sets on Dan Friedberg. He's amazing. He was one of the most incredible people to work for and we represented two dozen life insurance companies while I was there. I think they now have 5 billion in servicing. Just an incredible firm, incredible people. I'm still really good friends with a lot of the folks there. And I was coming up sort of on my ten year anniversary with Dan and someone approached me and said, Hey, there's all this tech happening in residential for residential real estate. If you could reimagine commercial real estate from the ground up, do you have opinions on that? And I'm like, hell, yes, I do. Yes, I do. I have opinions. And so I built one source and it was all the pain points that I thought didn't have to exist. Solve for that. And we built a Ferrari when we needed a Jetta. But you know, sometimes that's the way things go. And I learned a lot from the lessons working there and creating that. And we ended up selling to one of the founders of Lee and Associates. My fourth baby is now in Craig Coppola's hands and he's renting it with his family. So there's a really nice sort of arc there. And I needed a place to be in Second Century Ventures kind of open their arms. And I've been having an amazing time building a global corporate partnership program for them. So that's like sort of the weird arc for me.
Ian Group:
You said you said a couple of really interesting things in an awesome story. What I would love to go back to was you said that I think it was one of your earlier jobs. Someone or two people took you under their wing. And I think for anybody who's listening to this, that might be new to the industry. They might be thinking, well, how do I how do I get myself in that position where someone helps me learn the industry or I can find a mentor? I'm curious how you made that happen or how that that came to be.
Laura Millichap:
I think that David DiPaolo was very smart in that. When you build companies. Leadership matters and you have to properly align incentives. Right. So if you hire 25 salespeople to cover a small geographic area, there's not going to be collaboration.
Ian Group:
Right.
Laura Millichap:
And David Diplo was very smart in that he hired people that were more geographically dispersed. So there wasn't that level of competition, meaning fear that sometimes you have another sales organization.
Ian Group:
Okay.
Laura Millichap:
And so the two guys that were already doing sales were more established in their careers. You know, they they were just kind. And I think that if you ask and you work a network and you reach out on LinkedIn and you're willing to take the leap of faith of rejection, which I see is positive, and we can talk about that because I think that that's something that here in the US we do a really piss poor job of not teaching the benefits of failure and rejection. Like, those are great things. They're great. And here we're taught you have to be perfect. And that is the epitome of like fail. Like the worst aspects of failing is believing. You have to be perfect.
Ian Group:
Yeah, it's just. It's just not realistic. I mean, I can think of so many mistakes I've made along the way when I started out as a lawyer, I mean, just it's not reasonable to think that anybody's perfect, that any deal will go perfect, that any career is perfect. And I think what makes for more exciting podcasts is to talk about the the failures and the things that we learned, because how else is anybody going to learn from all those experiences?
Laura Millichap:
Correct. And in commercial real estate, it's very tribal. There's not books you can buy. Like everyone that started a series Simple ended up going through a two week Laura boo camp and we start with tacos, we whiteboard and it was just a two week boot camp of this is commercial real estate. These are all the frameworks within commercial real estate. These are all the base things I can teach you, but. It really takes 3 to 5 years to learn this business. And I still occasionally learn things which drive more and so exciting.
Ian Group:
To 3 to 5 years. It definitely takes a long time and there's a lot of learning by osmosis, which is why I think mentorship is really important and having people around you, one or more people around you that can teach you. If somebody comes to you, if I was to come to you today and say, Laura, I need your help, what should I do to advance my career to learn more? What do I do?
Laura Millichap:
Well, it depends on what part of the ecosystem you're in. Right. And commercial real estate is very. Segmented mean very hard to learn the totality of all of it. It's why it's taken me 20 years. It's really the amount of time it took.
Ian Group:
So, so specialized. Find your niche.
Laura Millichap:
Start. You have to start in a niche, right? Because if you think about brokerage, right, or you think about mortgage or you think about anything in commercial real estate, we are segmented. We have the four major asset classes and the ecosystems that surround those asset classes tend to be very pigeonholed. Right. Even the tech. Right. Are you serving multifamily? Are you serving office? Are you serving industrial? The solutions for one. The crossover is very different. Different, and the messaging is very different. And within commercials you have segmentation from the independent community, the mid-market and the institutional. And how you sell to all of those is radically different, right? The messaging is different, the pain points are different, the needs are different. So I think you really have to understand where do you want to be in the broader ecosystem of commercial real estate understanding you're going to have to pick some place to start.
Ian Group:
Yeah, absolutely. So talk to me now about what you're working on at Second Century.
Laura Millichap:
So Second Century Ventures is freaking incredible and they don't really understand how incredible they are. It's this amazing amalgamation of these really cool people and everyone's really good at what they do and they're crushing it in residential, but then they've got this entire commercial real estate framework. I think they're the only evergreen fund out there currently, and they pull you through an accelerator and then fund after. However, they've got this amazing rich ecosystem of participant start ups. And they, Dave and Tyler wanted to build something on the opposite side, more formal around corporations. And so they brought me in to start establishing global relationships that we can leverage more intelligently to run the business more optimally. So instead of 15 companies going to CBRE, right, saying, oh, we've got this, this and this, having a strategic relationship with CBRE, saying, hey, CBRE, what are your pain points that you want to solve for? And anything we see we'll share and let us know how that works for you. And that's sort of what we've been building is these deeper strategic relationships predominantly on the commercial real estate side we're working to on resi, but it's just a little slower to get started with every major industry player and trying to streamline communication, streamline what we're all funding. Right. That's the other hard part is when you look at 32 billion spent on PropTech, you and I both know there's only a limited amount of appetite for commercial real estate technology.
Ian Group:
Oh, yeah.
Laura Millichap:
Everyone has tech fatigue, everyone has fear. We're like the last batch. We're like cavemen over here with our rock and our sticks with fire, you know? So my thought was that we can all be focusing on the same things and collaborating more intimately instead of having 35 companies for AI why don’t we try four? Why don't we all have those four and let a clear winner or a couple frankly because it's never just one you and I know. If it’s one, it's Miserables.
Ian Group:
Yeah, well, you sound like the perfect person to do that because you have a lot of connections, you know, a lot of people, and that doesn't come overnight. That comes from taking out the trash early on in your career and and, you know, really like getting to that level and, you know, how the industry works. So it sounds like a perfect fit and it's really awesome, awesome to hear.
Laura Millichap:
It's, it's been really fun and the team is just so much fun to work with. I mean, you know, you've met them.
Ian Group:
Yeah, definitely. So we're just about out of time. But wanted to ask you just an unrealistic question, which is I know that you like science fiction and that you have a self-proclaimed book problem. What are your favorites? What are you reading right now?
Laura Millichap:
I just finished the Three-Body Problem. It's author out of China. It was really interesting. I think when you look at authors from different countries, fundamentally the way they think through things are a little different. So the writing is very different. And then I have a very complete extensive collection of 1930s, 1940s science fiction. So when I need a quick read, I always go back to those. So the Doc Savage, the Edgar Rice Burroughs. There was a couple publishers that just put out a bunch of weird stuff and I love it. I love it so much because you're talking about cloning. You're talking like, imagine if you had seven of the year the parties you could have and the crazy stuff that could happen. Right? Like, I like spending time thinking about that kind of thing.
Ian Group:
Seven Laura's together in a room would have a lot of energy.
Laura Millichap:
I mean, I know what they'd all be doing right now because I love my list making as much as I love my science fiction. So I know I'm doing right now, but I mean, imagine if there were seven Ian’s.
Ian Group:
What I'd crazy.
Laura Millichap:
I don't know any.
Ian Group:
We get a lot of work done in ProDeal, that's for sure. I just I just want to thank you for your time. It's been a pleasure. And we'll talk soon.
Laura Millichap:
Yeah. Thank you.
Outro: Thank you so much for listening to today's episode of The Closing Table. The Commercial Real Estate Industries Insider Podcast brought to you by ProDeal. If you're ready to start closing some deals, I highly recommend checking out ProDeal. Here's why it's a due diligence platform that helps deal teams streamline track and organize due diligence. It's especially helpful for big deals, portfolio transactions or shops with high volume, with endless amounts of documents, checklists and emails. Isn't it time that you and your team use it to a purpose built for your deals? For more information, please visit our Web site at Pro Deal Free SI.com and request a demo. Tell us you found Pro Deal on the podcast and give you 30 days for free if you'd like. Daily Content Advice on how to rise to the top, please be sure to follow us on LinkedIn Twitter. Now let's go start closing some deals.
