Welcome to Disruptive CEO Nation, where company founders, entrepreneurs and cutting-edge thinkers drop in from around the globe to share startup stories, insider insights and harder success lessons. Now here's your host, a woman who mastered business by placing heels on the ground all over the world, having worked with and coached CEOs and senior leaders from over 90 countries and who wants you to build your best business future. Allison K. Summers. Hi everyone. Thank you for taking time out and joining us for this episode of Disruptive CEO Nation. You know, we talk about all different kinds of industries and recently I've had a curiosity in the real estate space and we've had a couple of guests on to talk about fractional real estate ownership and how homeowners can access equity. But this is a different angle and I really value what this business is doing and so I'm so grateful to have Derek Barker who's the co-founder and CEO of NECTER to tell us all about what he is doing in his corner of the world. So Derek, you're in Atlanta today. I hope everything's great. Tell us what beautiful, wonderful things NECTER does in the business world today. Allison, so thank you for having me on firstly. NECTER is a real estate finance and technology company that provides liquidity to people who own commercial real estate, low leverage cash flowing assets, help them grow and improve their portfolio, focus mostly on the housing space. And we allow investors who are interested in real estate to get a high return, consistent cash flowing investment product without having to take construction risk or lease up risk or refinance risk. So I know in talking with you that you have said you've spent your entire career basically worrying about keeping housing affordable and working within the real estate market. So let's take a step back and tell us a little bit about the beginning and why this was such a huge place of interest for you. Wow, so the beginning for me was back in my college days. I was very involved in the finance space, started a business my freshman year and then there was a big financial calamity, a big real estate crash. And so early on I figured, hey, I'm young. Why don't I start getting involved in investing in real estate now while prices are low because I figured I'd have a long runway before the next crash. And so that's how I got involved. And what I saw was that there were inefficiencies in the market. There were capital inefficiencies, labor and material inefficiencies and land inefficiencies that made it so that it was just hard to produce the housing where it's needed and when it's needed. And I said out, I worked at Goldman Sachs for a while, but then I ended up leaving there and set out on a path to figuring out how I could work to overcome those challenges and provide more housing, specifically in areas where they're high demand areas like the Southeast and the cities in Atlanta for instance in LA. Well, and we all I think are aware that there is a housing crisis. I think when you say, I think you use the words when we are prepping for this about it being such an unhealthy market. And I think the piece about people that have a lot of real estate, whether it's commercial real estate or multi-family real estate, it can be a locked market in certain places in the country. Yeah, yeah. I mean, there are a few things. So firstly, for real estate, the majority of the owners of real estate, housing, you have individual owners and then you have these professional owners of real estate who are, who have say, 100 million or $200 million portfolios. And then you have institutional owners and that's what you think of like Goldman Sachs and Blackstone, these huge companies. The institutional owners, they have the best access to capital, the most access to cheap capital. Also owners also have access to capital because you have, because the large pools of capital can use algorithms to deploy there. But there's this big space in the middle. You have professional owners or some regional or local businesses who have multiple apartments. And they usually, they lack access to the capital that you'd expect and anticipate a small basis to have in order to be able to just continue to build and grow and thrive. So that's one of the major inefficies in the market that we set out to solve at NECTER. Yeah, and I got to believe, you know, we shouldn't want the institutions to own all the real estate and the majority of things. That just doesn't seem like a, an equitable model for most of us. It's not that firstly, the big institutions, they don't own most of the real estate, real estate is really fragmented. But what I would say is they have a lot more efficient capital. So they, so if they, you know, if the conditions are right, they can do the best job building quickly if it needs to happen or when there's opportunity like now. However, they have to deploy capital in big chunks, which means that they have to do big developments where that are luxury because that's what fits their model, big luxury developments. But a lot of Americans, a lot of the population, they just don't live in that. Like, you know, they can't afford the brand new big development on main and main, which is institutional quality. They need to live, you know, in some places that's nice, you know, that was like a, you know, a nice, you know, B class area, maybe in the suburb or in a lot of those things are just the owners of them, they have very inefficient capital, which makes it hard for them to produce a lot of that type of, of that type of asset. That is, it being more affordable to more people. So you've been a part of a lot of different business building ventures throughout your career. So is there something specific that you, when you started nectar that was a new lesson learned or something that you were like, I learned this in a past venture, I'm going to do better with nectar. 100%. There's so many lessons. I've been asked for in my whole life and that's really just a series of like learning lessons from other people and then like, you know, in yourself. I say a couple of, you know, big things is the opportunity is where there is a demand for something where there's a problem where people have a problem and that's being overlooked. That is where the opportunity is. And if everybody is doing it, then it's probably not where the opportunity is by definition. So that's kind of what we saw for nectar specifically. I spent a lot of time in real estate and I went through multiple cycles and the last thing, you know, one thing I learned is that cash flow, de-risk your business. If you have cash flow or if you have an asset that's cash line, then it is de-risk. That means you have sustainability. Leverage is also something that it doesn't matter what the underlying asset is. It doesn't matter the dynamics. If there is more leverage, if you borrow more against it, it's just more risky. And if you want to, and you can't predict when there's going to be swings in the market, all you can do is set yourself up to be able to survive those swings. And in nectar, we are specifically partnering with the companies that are just set up to survive those swings because they have low leverage, cash line gases. And these are the people with the strong hands and strong operational shops that we need to be supporting so that we can continue to build housing and build these companies up. Use the housing to meet the demand that we have in the market. So let's talk about nectar in terms of the vision, values, and culture that you went about saying this is what this company is going to represent. Okay. Okay. Yeah, vision, values, and culture. I say our vision is that, firstly, you can apply technology to every part of a business so that you can be flexible and fast. And that's what that's caught us. We move quickly and we are thorough. You can leverage technology both to be more to execute faster and to be more thorough. And that's something caught us. And our vision is that we are going to supply. There are people fighting on the front lines of the housing market battle or the battle for affordable housing. These are developers that are building in communities and neighborhoods. They're small and medium-sized companies. And we are going to use technology and capital to arm these people so that they can supply the market with the housing that's needed in order for us to have a more healthy market. That is such a wonderful vision. I just really like that. I think if you look at the UN Sustainable Development Goals, there's just a housing crisis everywhere. And I think any organization that's looking to help resolve it is doing us all a favor. So thank you for that. Hey, I want to go just a step deeper on the technology. I know that your team is leveraging AI in different ways. Is there any part of that that you can share with our listeners today? I can. You mentioned in your last question, not to skip over this, I'll get back to it. Culture. You mentioned culture. And one thing that we've infused in our company is that we will use cutting-edge technology. It's a part of our culture at every part of the company. So every week we have a team, a stand-up where people go up and demonstrate this is how I use this, this, you know, this how I utilize AI this week to do something that's helpful or interesting. And that's the way that firstly is an accountability thing. So, you know, people in the company are excited to show this and, you know, to really work on it throughout the week. And then it's a way to spread the knowledge around the company where people can see, oh, wow, this is an interesting way that I can become more productive by, you know, taking what my colleague did. So that's a core part of our culture that allows us to disseminate information. And so we have like great adoption. And we've got tremendously more efficient, but then just better at every aspect of our company. And then we just have technologists who are building product, you know, and, you know, what we do is we take core processes. We have an underwriting process, for instance, core process in a lending business. And we say, okay, well, these are the steps it takes if we're going to create an investment memo, an underwriting deal. What things are the hardest? What things take the longest? Where are we making mistakes? And we rank them. And then we just take the top three. And say, okay, how can we use technology or build technology to make this instead of a weakness or a bottleneck make it a strength? And so that's what we've done. And if you, you know, and that's part of our course, so this quarter will take these three parts of this process and automate these three. And then it goes from in the space of one quarter, you have something that's a bottleneck that's taking the most amount of time or where there's the most errors by the end of the quarter, oftentimes, what you're seeing is this is something that is no, it went from taking the most amount of time to not taking any time at all. You know, we've had, we've had things that we have to review long, mortgage, documents, operating agreements. You stick hours, eight hours an average. Now it's taking about 15 minutes. So that we're able to make huge strides based off of the technologies that are in the market now. So tell me a little bit more about the makeup of your team that you've got there. Are they all on site in Atlanta? Are they distributed? Tell me a little bit about that. So we have a core team here in Atlanta, but we also have a distributed team, you know, for some roles that don't need to be in person. We have a part of our team, that's what we have a product team that's just focused on, you know, identifying product roadmap and executing on a product roadmap, I building technology for our team. We have an origination team, focused on just getting the word out about our product, you know, talking to the great real estate sponsors and operators out there and bringing, you know, identifying people who are great partners and then helping them through our process. We have underwriting team and they're focusing on underwriting naturally. Making sure that we are committing capital responsibly to the right people at the right sizing in the right places. We have a capital markets team, the capital market team, which is also here in Atlanta, this focus on, you know, we have investors that, you know, we provide quarterly returns to, we've made 100% of our quarterly returns or distributions since inception. So, you know, always making returns and they're always talking to them and making sure that they're up to date with what we're doing and how we're doing and what our thoughts are on the market. And then we have a servicing team. The servicing team services are our partners or borrowers you can call them and investors. So they make sure everybody, if there are any questions, their answer and they make sure they're always notified if, you know, of important time frames and requirements. So whenever anybody starts a new, a new company and a new business marketing and sales is critical, what has been some of the pieces to nectar success in terms of getting your word out in the marketplace? The biggest piece of art success is having a product that really solves a pain point. It solves a problem. You know, it's, we have a unique product. It's uniquely fast and flexible capital. We can get closed in seven days, you know, from, you know, from the time that we, someone comes to our process, you know, we can defluxable around any kind of situation capital stack as long as we have low leverage cash, like I said. You know, we put out content. We have in events, both digital and in person. You know, we have, we do typical, we do some amount of, of, of ads, but it's mostly, you know, providing content and webinars and really trying to provide value to our customers and to our investors so that they, you know, they can use our product or not, but they know about us and they know that we're trying to help them to be better at what they're doing. And so that's really how we get the word out. Derek, as a founder, CEO, what makes you say today was a really great day. What brings you joy? Wow, the fortunate, I am fortunate in that I have a lot of really great days. Like I, I, I, I tell people, I'm, I've, I've just been unreasonably blessed. I'm, I'm professionally progress, being 1% better, like, you know, you can get, some days are tough. You get to the end of the day and your brain feels like it's going to melt and ooze through your ears, you know, but if the, if you have put one foot in front of the other, if you're 1% better and 1% better might mean you learned from a mistake and you took the 30, you know, you took five minutes at the end of the day to reflect on that and be okay, well, we're going to make changes in our business or processes because of that. But getting 1% better and then seeing that in our culture, in our team and seeing that in our clients, just like, set, you know, getting 1% better and then being able to look back and say, well, look, look at what we've done. Where they be physically, what we built by building our portfolio to be better doing capital improvements or culturally or digitally, like that really, really, really excites me. It's my favorite part of running a business. So you've given us a couple tidbits that would be advice you'd give to other business builders and founders, anything else that when you meet somebody who is in that scaling up phase, that's kind of advice for them. Wow, it buys. Action bias, do it. Like, whatever it is, do it today in learn. Like, you know, there's not like, there's no, like, there's no teacher better than experience. And if the more, like, the greater surface area you have for experience, the faster you'll be able to get to wherever you're trying to go. So just act. If you have an idea, just and go towards where I think it was Robert Frost, the road less to travel, like, just because something seems hard, just because there's a road that isn't traveled, honestly, that's probably where the opportunity is. And it might be harder. But if you get through it, what you're going to realize is there's not a lot of competitors around, not a lot of people go that route and there's a lot of opportunity. If you're able to just make yourself better, focus and just move towards where there is opportunity. Hey, is there anything that you're listening to watching, reading that you would recommend to anybody or somebody to follow on LinkedIn? So I listened to the AI Daily Brief, which is a podcast, a YouTube video is not that long, but it is super helpful and super practical. I mean, everybody's heard about it. It's going on. Like, you know, there's this, you know, the technology and technological advances. The things that we are going to be able, the things that we're able to do today are things that were impossible a year ago, maybe impossible, but it seemed like, you know, but probably. And we all have for $20 a month, like an incredible amount of power. So brushing up, like in the AI Daily Brief does a good job of like saying practically, like this is some use cases. And that's kind of how I started on this journey that's now really transformed my company. Okay, Derek. I always like to ask, you know, you are an energetic, enthusiastic, you know, CEO, but you've got to have balanced to that in your life. What keeps you grounded outside of nectar? Grounded. I don't know, but I am also an energetic, energetic, enthusiastic husband and father of four. And it keeps me busy outside of that. I tell you that much. My weekend calendar is every bit as busy as my weekday calendar. So no, but my children, man, they inspire all, you know, I look at, you know, talk about getting one percent better, like again, I've just been blessed with like, you know, for human beings that they're smart. They're, you know, they're, and they're, they are actively trying to figure out how to make an impact on the world and to be able to usher that and lead that. And you know, that's, it is the joy of my life. Hey, what is the vision? If we come back and talk to you in two to five years, what is the goal in the vision for nectar? I like to normalize, like in the commercial real estate space, being able to close on a, on uncapital in a week or less, I want that to be normal. We want to be able to regularly do one day closings. We can't do that right now. So if you, if you listen to this, don't show up and say, hey, can I close tomorrow? I can't right now. But in two years, with the technological advances that we're saying, we want to be able to do a full thorough diligence, fly out, meet, come back in one day, be able to get close. And we want the current crop of medium size commercial real estate sponsors. These are the people who are on the front lines of the affordable housing fight that we're having that are like fighting the, you know, capital markets and the labor markets and the material markets and all the turmoil going on there and they're making it work, keeping all of these constituencies happy and really building communities and really keeping our communities together. We want to be, we want to empower them and tip the balance of power so that they can be aggressively expanding in this time. So they can be building and healthy and strong and make our housing market more healthy and strong so that just supply can meet demand. Hey, Derek. Thank you so much. This was so much content in such a short period of time. Is there anything else that nectar is working on or anything else that you would like to share with our listeners or a tip for our listeners? I share the tips, some tips. I don't know. I've topped my head any gray, any gray. Yeah, you've given us a lot. Other than my cry hard and like whatever happens, kind of happens, you can't control it. I will say, if you are looking for to invest in real estate, we would love to talk to you whether you invest with us or not. We do have a fund that provides 12% distributions every quarter backed by dozens of low leverage, cash, low and commercial assets, but also just love talking about the market. And we have a team of people who love talking about the market, use nectar.com. You can reach out. We'd love to hear from you. That is fabulous, Derek. Thank you so much for dropping in and sharing all of this information. To our listeners, find Derek on LinkedIn. Follow him. As he said, he's got a lot of great content that they put out to help you learn this space. Check out use nectar.com. And as always, if there's something that Derek said in this episode that you think somebody else needs to hear, pass along a copy. And if there's another disruptive CEO that you think we should talk to, send me a note at
[email protected]. Derek, thank you so much for joining us. Thank you for having me, Allison. Hey, everybody. Keep your eye on the future and always be disruptive. Thanks again for joining us. 49 faces look to him in triumph. Over the last 12 months, they had each taken turns and promoted his business for a week at a time, driving over $987,342 in revenue. What if you had a network of 50 centers of influence who promoted your business every week for a year? Grab your copy of the number one Amazon bestselling book, The Ultimate Guide to Growing Your Business with a Podcast. It's 33% off the Amazon price by going to ultimatepodcastbook.com. Again, that website for 33% off the Amazon price is ultimatepodcastbook.com. This episode, yeah, we made it. The voice you just heard, we helped put them there. And right now, someone's out there thinking, I should have my own podcast. You should. Not because it's trendy, not because content is king, but because your voice has weight, your ideas have gravity and the right people. They're waiting to hear you. We build shows that don't just sound good. They work for your brand, your business, your audience. Ready to step up to the mic? To see if you could grow your business with a podcast, apply at yourdrain50.com/seth-green. Gr-e-e-n-e because your story deserves more than just a years.
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