foley schmidt | mindful real estate partners | dartmouth | ex: @lazard @famousdaves @pennyscoffee @fbacap
msp | aus
Joined September 2009
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Please allow me to reintroduce myself:
Recent followers, here's a little bit about me:
- Grew up in MN, live in Austin
- Played football @dartmouth
- Started my career in IB @Lazard
- 4 years as Chief of Staff @famousdaves
- Built a cafe chain with @deanbphillips
- Partner at FBA Capital, exited July '22
- CFO @profoundcommerce, exited Feb '24
- Wife is head of retail at a badass DTC brand
- Have a 20 month old son, Manny
- Co-founder of Mindful Real Estate Partners, which will become the Home Depot of financial products for small to medium sized developers. Scaling to 100+ single family and multi family builds in 2026.
- Loves: running, F1, and USC football
Ladies and gents, that is your next Formula 1 Champion Kimi Antonelli coming into turn 1 at the Austin Grand Prix.
Had my first *issue* in a Robotaxi / cybercab last night.
As you can see from the picture below, our cybercab did the *same loop* twice when attempting to cross to the west side of I35.
However, the car appeared to be self learning because after being unable to do so twice, it took a different route the third time.
So cool.
Another electric factory sports weekend in Austin:
> Formula 1 Grand Prix
> Maroon 5, Post Malone, Alesso Concerts
> Spurs vs. Rockets (KD homecoming)
> Texas vs. Ole Miss
Who has it better?
Raising money from friends and family is one of the biggest privileges in investing. It's also one of the easiest ways to permanently damage relationships.
Here's a few do's and don'ts I've learned:
DO:
> invest meaningful personal capital alongside them
> explain the downside before discussing the upside
> set realistic expectations around returns and timelines
> put everything in writing, regardless of the relationship
> treat their capital with more care than your own
DON'T:
> accept money someone cannot afford to lose
> confuse personal trust with investment due diligence
> let family relationships influence investment decisions
> go silent when a deal starts underperforming
> make someone feel obligated to invest because they know you
The ultimate rule is to never put yourself in a position where protecting your investment requires sacrificing a relationship.
Hope this helps!
If you are in Austin and want to go to Formula 1 (Turn 12 bleachers) and VIP / stage side to Maroon 5 tomorrow, please let me know.
I am giving away a pair of tickets.
Living in a place like Austin is cool because with all the big events going on, you never know who you are going to run into.
It's Formula 1 week, and I've run into two drivers already (Lando Norris and Pierre Gasly). I passed Gasly this AM doing my morning walk.
Last year, Matthew McConaughey. The year before that, Elon Musk and Joe Jonas.
Austin has its own set of issues (as do e any city), but it's a pretty damn cool place. And many love it.
If I could add a sixth lesson to this list: never use high leverage to turn a mediocre deal into a projected home run.
It is tempting to stretch to 90% LTC because that is what makes the financial model show a 30%+ IRR.
Leverage doesn't make a bad deal good, it just magnifies the consequences when things don't go according to plan (construction delays, cost overruns, higher carrying costs, slower exits).
All of these things become substantially more painful when you're highly leveraged.
I would much rather finance a project at 70% LTC, over-raise equity and maintain healthy cash reserves, and sacrifice a few points of projected margin.
Don't let the internet fool you, real estate development and investing is really hard. Here are five things I'd do differently if I was starting from scratch:
1. More investing, less developing. I'd spend substantially more time finding exceptional developers who have been doing this for decades and substantially less time managing general contractors on our own projects.
The returns have been better when we've backed experienced developers who rather than trying to do everything ourselves.
2. Never invest in a second project with a developer until the first one has gone full cycle. I don't care how good the first project looks on paper or how well construction is progressing.
Until you've gone from land acquisition to final distributions, you don't really know how well that developer performs.
3. Go bigger, faster. A $250,000 project can require nearly as much underwriting, legal work, financing coordination, and oversight as a $2,500,000 project.
The difference is absolute profit dollars. We've spent an enormous amount of time on smaller projects that, even when very successful, don't move the needle enough to justify the effort.
4. Focus on larger markets with deeper buyer pools. We've invested in several tertiary markets where there was cheap land, reasonable construction costs, and attractive projected margins.
But there is a significant difference between building a home where there are 100 potential buyers and one with more than 5,000. When interest rates are low and buyers are plentiful, that distinction might not matter. When mortgage rates rise, affordability deteriorates, transaction volumes slow, and the absolute number of potential buyers matters enormously.
I'd gladly sacrifice a few points of projected return for a substantially deeper buyer pool and a more liquid exit.
5. Be willing to walk away from *good* deals. A deal can be profitable and not worth doing. Capital, time, and attention are all finite. Every dollar and hour committed to an average opportunity is unavailable for an exceptional one. I've learned that saying no to a good deal is what often creates the capacity to say yes to a *great* one.
Hope this helps!
Don't let the internet fool you, real estate development and investing is really hard. Here are five things I'd do differently if I was starting from scratch:
1. More investing, less developing. I'd spend substantially more time finding exceptional developers who have been doing this for decades and substantially less time managing general contractors on our own projects.
The returns have been better when we've backed experienced developers who rather than trying to do everything ourselves.
2. Never invest in a second project with a developer until the first one has gone full cycle. I don't care how good the first project looks on paper or how well construction is progressing.
Until you've gone from land acquisition to final distributions, you don't really know how well that developer performs.
3. Go bigger, faster. A $250,000 project can require nearly as much underwriting, legal work, financing coordination, and oversight as a $2,500,000 project.
The difference is absolute profit dollars. We've spent an enormous amount of time on smaller projects that, even when very successful, don't move the needle enough to justify the effort.
4. Focus on larger markets with deeper buyer pools. We've invested in several tertiary markets where there was cheap land, reasonable construction costs, and attractive projected margins.
But there is a significant difference between building a home where there are 100 potential buyers and one with more than 5,000. When interest rates are low and buyers are plentiful, that distinction might not matter. When mortgage rates rise, affordability deteriorates, transaction volumes slow, and the absolute number of potential buyers matters enormously.
I'd gladly sacrifice a few points of projected return for a substantially deeper buyer pool and a more liquid exit.
5. Be willing to walk away from *good* deals. A deal can be profitable and not worth doing. Capital, time, and attention are all finite. Every dollar and hour committed to an average opportunity is unavailable for an exceptional one. I've learned that saying no to a good deal is what often creates the capacity to say yes to a *great* one.
Hope this helps!
Loan closed for our newest Austin renovation project. Feels like my millionth time at the closing table in the last three years.
Grok estimates that we have now killed an entire tree with the paper used from closings.
Took three separate trips in Robotaxis last night in Austin. Three tip options post ride:
$0.69
$4.20
Custom
Elon continues to be hilarious.
Now let's build a million of these in California and other markets where homeownership feels impossible.
A beautifully built 2-bedroom and 2-bathroom home and not a shortcut taken. A perfect first home for a newly married couple who is looking to start a family.
Steve Sarkisian has failed the Texas Longhorns by not QB sneaking the football on 3rd / 4th and 1 or less in pivotal situations this season.
Tom Brady QB snuck the ball at a 90.5% success rate on third-and-1 or fourth-and-1 in his career.
Arch is 1000x more athletic. Insane.
Trying to close on our newest renovation project in Austin on Monday. Set up to close at the local title office at noon.
What hits my inbox at 5:45 PM on Friday?
Would have loved to know about this issue for the last month (lol).
Taco Bell and Milk Bar had a baby. I ate it so you do not have to (but you should). 1000/10 would eat again.
I present to you, (unarguably) the top 10 fast food menu items of all time:
1. Quarter Pounder w/ Cheese - McDonald's
2. Cheesy Gordita Crunch - Taco Bell
3. Caniac Combo - Raising Cane's
4. Spicy Chicken Sandwich - Popeye's
5. Big Mac - McDonald's
6. Crunchwrap Supreme - McDonald's
7. Original Chicken Sandwich - Chick-fil-A
8. Double Double Animal Style - In-N-Out
9. Baconator - Wendy's
10. Whopper - Burger King
Don't hate, I don't make the rules!
Without further ado (and unarguably), the top 10 casual dining chain menu items of all time:
1. Triple Dipper - Chili's
2. Quesadilla Burger - Applebee's
3. Rolls w/ Cinnamon Butter - TX Roadhouse
4. Cheddar Bay Biscuits - Red Lobster
5. BBQ Chicken Pizza - CPK
6. Bloomin Onion - Outback
7. Unlimited Breadsticks - Olive Garden
8. All American Feast - Famous Dave's
9. Avocado Egg Rolls - Cheesecake Factory
10. Bang Bang Shrimp - Bonefish Grill
A dry cleaner does not make its profit by removing stains from clothes.
The business thrives on predictable, recurring revenue from garment storage and bulk laundry services. True cash flow comes from off-season storage programs that run in the background.
Customers pay ~ $20 / month for seasonal garment storage for their winter coats, down jackets and wool blankets. These are stored in climate controlled storage vaults through the summer. That fee comes in every month while the coats stumpy hang there waiting for colder seasons. Every additional rack of coats creates pure cash flow with zero incremental labor.
Uniform contracts with local businesses also drive recurring revenue. Think local physical therapy clinics, dental practices, and restaurants who need clean coats, aprons and towels delivered every week. A small business uniform contract can pay well over $500 / month. Securing these commercial contracts locks on guaranteed recurring revenue before the retail front doors are even open.
Finally, volume wash and fold is a tremendous business in itself. These are priced by total poundage rather than individual garment pieces. Once the equipment is acquired, variable costs are low, which allows profit margins for these services to clear 40%.
I love the dry cleaning business because specialized machinery creates a high barrier to entry. In addition, environmental regulations make it difficult for new competitors to enter the market. Existing facilities hold a protective barrier that shields them from competition!
Without further ado (and unarguably), the top 10 casual dining chain menu items of all time:
1. Triple Dipper - Chili's
2. Quesadilla Burger - Applebee's
3. Rolls w/ Cinnamon Butter - TX Roadhouse
4. Cheddar Bay Biscuits - Red Lobster
5. BBQ Chicken Pizza - CPK
6. Bloomin Onion - Outback
7. Unlimited Breadsticks - Olive Garden
8. All American Feast - Famous Dave's
9. Avocado Egg Rolls - Cheesecake Factory
10. Bang Bang Shrimp - Bonefish Grill
606 consecutive days more than 20,000 steps ended today on an operating table.
The streak is officially over. Today I completed surgery under anesthesia to repair a grade 2 varicocele on my left testicle.
I posted last week that this procedure was coming up. For anyone unfamiliar with the diagnosis, a varicocele is an enlargement of veins inside the *sack.* it usually occurs sometime around puberty and *can* get worse over time.
I had zero physical pain or symptoms and never noticed one testicle was 33% smaller than the other. I jokingly blamed my wife for not noticing when I was diagnosed, lol. We only discovered it after a few months of trying to conceive and visiting a male fertility specialist.
When a couple struggles to get pregnant, the common assumption is that the issue sits with the female. Men rarely get tested, and men almost never speak about it publicly.
The medical data shows that varicoceles are present in 15 percent of all adult men and cause 40 percent of primary male infertility.
Thankfully, surgical repair significantly improves sperm quality and live birth rates.
This is the last time I will post about this surgery.
Men, check your balls. If you have trouble conceiving, don't assume it's your partner. Go get tested. It's often a common issue that is fixable.
