The FORT Podcast: Sean Sweeney
Sean Sweeney is the Co-Founder of Hall Sweeney Properties, a Minnesota-based multi-family development company. On this episode, Sean talks about his journey working as a receptionist in the industry, navigating through the ’08 crisis, and ultimately founding his own firm.
Sean also breaks down the process of a ground-up development including what to look for in sites, bringing on architects and contractors, his passion for design, terms to look for in contracts, property management, and stabilization.
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(02:35) – Sean’s Background and Early Career as a Receptionist at Trammel Crowe
(07:52) – What did you do to position yourself as a person to hire for project manager when it was the right time?
(10:19) – Sean’s Movement During the ’08 Crisis
(17:01) – Sean’s Jump to Starting His Own Organization and Decision to Focus on Class A Urban Infill
(21:53) – How did you find your partner and what role does he play in the company?
(24:03) – Setting the Stage – Are there any other full-time employees in the company or is it just you and Jeff?
(26:58) – How long do these deals take from walking the site for the first time to where it’s stabilized?
(31:12) – What makes a site ‘great’ for you in a project?
(34:33) – Is most of the land you’re putting under contract un-entitled for multi-family?
(36:16) – How do you find sites?
(39:07) – What does your preliminary underwriting process look like?
(42:12) – How do you pull rent prices?
(42:48) – The LOI Process & 3rd Party Reports
(47:06) – What terms matter in contracts and what does the site need to be when you’re ready to close a year later?
(50:58) – What stages of the contract do you put up hard money?
(52:13) – What city approvals are you typically getting on deals?
(54:05) – At what point are you hiring the architect and does the GC participate with them? How do you come up with a budget that fits your design and that you’re comfortable the GC can deliver?
(57:03) – Are there any big points in a contract with a GC that matter?
(1:00:47) – Who is accountable for the MEP and structural engineers: the architect, the contractor, or you?
(1:01:17) – Where do you get inspiration for design?
(1:03:35) – Do you spend more on projects because you’re so design-forward?
(1:06:03) – Do you get paid premiums in rent because of your design approach?
(1:07:27) – Property Management Needs on 45-unit Property vs. a 100+ Unit
(1:09:01) – Does your architect mock up your interior as well?
(1:09:41) – Who does your common amenity furniture?
(1:09:57) – How do you process draw requests?
(1:11:04) – How do you finance projects and what happens when you stabilize since you are looking for long-term holds?
(1:15:40) – What’s the most popular unit size right now?
(1:16:59) – What amenities matter right now?
(1:18:59) – Are there any repeat issues you’ve seen from design to breaking ground?
(1:20:46) – What are some of the biggest surprises that you weren’t expecting as you look back?
(1:22:42) – How did the civil unrest in MN last year affect your business?
(1:27:25) – What’s the best book you’ve ever read?
Rich Dad Poor Dad by Robert Kiyosaki
Emotional Intelligence (EQ) – Daniel Goldman
(1:29:33) – How can people find you?
Twitter – www.Twitter.com/SeanDSweeney
Episode Summary
Sean Sweeney, co-founder of Hall Sweeney Properties and a seasoned professional in real estate development, joins Chris Powers on the Fort Podcast, sharing insights and experiences amassed over his career, navigating through the intricate world of property acquisition, investment, and development. The discussion, rich with practical knowledge and strategic approaches, unfolds a narrative that not only traces Sean’s trajectory in the real estate domain but also provides a glimpse into the strategic, operational, and financial facets of property development and management.
Emphasizing the criticality of swift and decisive action in the realm of real estate deals, Sean shares significant takeaways from his tenure at Timberland, highlighting that exceptional deals are rarities and when one surfaces, immediate action is paramount. The discussion underscores the essentiality of not only identifying but also rapidly capitalizing on opportunities, often requiring work outside of conventional hours and an unwavering commitment to seizing the moment. His astuteness in identifying and acting upon viable deals has been pivotal in his successful career and is a principle deeply embedded in his professional practice.
A prominent theme that surfaces is the strategic acquisition and management of properties, where Sean discloses the methodologies and practices employed by Hall Sweeney Properties. Notably, the firm leans towards utilizing local banks for financing developments, typically engaging in construction loans that account for around 75% of the total cost while raising the remainder through equity. Sean remarks on the liquidity and activity in the debt and equity markets, acknowledging that this has considerably facilitated their projects, while also noting the challenges that emerge during inactive market periods.
The discourse delves into the equity aspects of projects, with Sean and his partner, Jeff, aspiring to be the largest individual investors in each venture they undertake. This approach, deeply rooted in their ethos, is not merely about leveraging external investment but inviting investors to join bets that they are substantively invested in, both in terms of resources and belief in the project’s viability. The Hall Sweeney model is built upon substantial personal investment, ensuring that they are not simply leveraging external funding but are deeply financially rooted in their ventures, signifying a robust confidence and commitment to their projects.
Furthermore, Sean highlights the value of intangibles and alternate pathways to achieving objectives, recognizing that traditional routes such as formal education might not be the pathway every successful individual takes to achieve their goals. He underscores that the diverse routes to success are as varied as the individuals who tread them, emphasizing that the various pathways to success in real estate and business are as multifaceted as the individuals involved.
In the intricate world of real estate, the conversation weaves through various aspects, including financial strategies, investment philosophies, and operational methodologies, providing listeners with a panoramic view into the workings of property investment and development.
The FORT with Chris Powers is produced by Straight Up Podcasts