Real Talk: Real Estate Discussions with Andrew Kirsh

Episode: The Art of Finding Good Real Estate Deals with Bill Shopoff

Release Date: November 23, 2022
Guest: Bill Shopoff, Founder of Shopoff Realty Investments
Location: DFW Airport Lounge (Bill Shopoff)

Episode Overview

This episode of Real Talk features an in-depth conversation between host Andrew Kirsh and Bill Shopoff, one of California’s largest real estate developers. The discussion explores Bill’s unconventional approach of pursuing value across all asset classes, his journey from New York to Texas to California, signature deals and mistakes, and strategies to navigate the current real estate market. Both newcomers and industry veterans will find actionable insights and candid recollections from Shopoff’s 30+ year career.

Key Discussion Points & Insights

1. The Origins of a Generalist Approach (02:53–06:25)

• Diverse Start: Bill discusses how his company began in the Resolution Trust Corporation (RTC) era, buying and managing everything from churches to bowling alleys, forming a habit of evaluating varied assets and geographies.
• Team of Specialists: While Bill remains a generalist, he employs in-house experts for mall conversions, land entitlement, and construction.
  • “When I started the firm 30 years ago, we were buying pools of assets… we literally owned everything from churches to synagogues to bowling alleys.” (03:00)
• Scale: Shopoff Realty now has 70–75 people and owns property nationwide.

2. Sifting Through Opportunities: “Story Buyer” (04:41–06:25)

• On receiving hundreds of deal emails daily, Bill describes leveraging acquisitions staff and focusing on "story opportunities"—properties with unique challenges (and upside) rather than standard transactions.
  • “The majority of opportunities that we really pursue are story opportunities… we tend to do more challenging assets where our pay is better if we can solve a problem.” (04:51)
• Reputation for problem-solving gets them complex deals, though occasionally they'd prefer an “easy button” deal.

3. The Value Creation Common Thread (06:25–09:41)

• Bill compares his approach's evolution to Warren Buffett’s shift from “cigar butt” investing to focusing on quality assets with a protective "moat."
  • “We are value driven… if we don’t think we can do [something] well, we probably don’t do them at all.” (08:21)
  • Noted he’s bought and sold over 1,000 assets in his career—a track record built on continuous learning, including from expensive mishaps.

4. Signature Wins & Missteps (18:20–22:18)

• Pivotal Moment: The 1994 RTC portfolio bid—qualified for a $13M equity deal without the capital secured, relying on hustle, quick networking, and a relationship with Credit Suisse that endures today.
  • “We needed $13 million in equity... we didn’t have it when we bid... started making phone calls… they showed up at noon on Monday, they shook hands...” (19:34)
• Biggest Miss: A failed $72,000 apartment building deal led to millions in losses, but offered invaluable lessons.

5. How Bill Entered Real Estate (12:39–17:56)

• Born in New York, raised in Texas, educated (originally in marine biology) at the University of Texas. Almost took a finance job with Goldman Sachs in Houston but instead pivoted to real estate in Austin due to personal circumstances.
  • “I never intended to go into real estate. I actually got an undergraduate degree in marine biology and I was going to be the next Jacques Cousteau.” (13:11)
• Shopoff Realty started in 1992 with $250 from each of 4 partners—grew so one partner’s share sold for ~$7-8M years later.

6. Lessons Learned & Perspective for Newcomers (22:18–25:42)

• American dream, “rubbing two nickels together,” is alive and well—success still demands hustle and continuous self-improvement.
  • “You gotta be outstanding. You gotta be outstanding every day. You gotta be better. You gotta be 1% better than the next best guy.” (24:31)
• Hard work and tenacity matter more than just intelligence:
  • “He gets up earlier than you, he stays up later, he works harder… he’s completely tenacious and doesn’t let go of an opportunity.” (24:47)

7. Tools and Technology in Real Estate (25:42–29:02)

• Bill uses Excel proficiently and enjoys spotting errors analysts miss, but believes quick “back of the envelope” understanding is crucial—models (“ARGUS output”) are only as good as their inputs.
  • “You can make Excel do anything you want it to do... there’s zero chance that the model I’m using is going to be accurate.” (27:57)
• Emphasizes the necessity of both analytical rigor and street-level “touch and feel” for successful investing.

8. Flexible Capital Sourcing Strategy (30:05–31:55)

• After being left stranded when a partner (Credit Suisse) couldn’t fund a major resort deal due to unrelated losses, Bill vowed never to rely on one capital type.
• Today, Shopoff employs institutional JV, funds, single asset syndications with family offices/individuals—a “multi-stooled” approach for resiliency.

9. Today’s Market Conditions & Tactical Advice (31:55–38:09)

• Rapid Market Shift: Institutions exited the market seemingly overnight, making big deals harder to capitalize.
  • “We went from ‘we’re all in for all your deals’ to ‘we’re not in for any of your deals’ overnight.” (33:03)
• Deal-Making Example: Describes salvaging a complex land deal in Mesa, AZ through creative financing, renegotiating terms, and assembling an entirely new capital stack right up to closing.
  • “Six days before closing, the preferred equity piece… walked… I put the deal back together from Europe.” (34:12)
• Sees the current window as one for “have to” sales and opportunistic purchases, expects normalizing in Q2 2023 once sellers adjust expectations and the Fed possibly reverses course.

10. Predictions & What’s Next (38:47–46:30)

• Bold forecast: Interest rates will be lower by next summer (2023); expects a wave of forced sellers before market normalizes.
  • “Rates are going to be lower next summer than they are today… I’d be shocked to see a 10-year [yield] 2.50 next summer.” (39:00)
• Shopoff is closing major sales and may reinvest proceeds at advantageous prices amid current dislocation.
• Ongoing focus: conversions of underutilized retail to residential/creative office, “filling demand” rather than inventing it.

Notable Quotes & Memorable Moments

• On Problem-Solving:
  “We tend to do more challenging assets where our pay is better if we can solve a problem. We’ve gotten a bit of a reputation for that... sometimes it gives us pause because we can solve a lot of problems. I’m not sure today we want to solve as many.” (04:53–05:38 | Shopoff)

• On Risk & Uniqueness:
  “If I want to go buy a redevelopment site… there’s one of them. You have to strike while the iron’s hot… maybe I would have bought it cheaper… but maybe I wouldn’t have bought it at all.” (07:23–08:09 | Shopoff)

• On Learning from Failure:
  "I could write a book just on that one... that was an expensive lesson. It was a lot more than going to the best colleges in the country." (11:02–11:16 | Shopoff)

• On Success Factors:
  “The intellect is probably the least valuable of all those things… If it’s about smart, everybody in Mensa would be a millionaire.” (25:19–25:35 | Shopoff)

• On Modeling and Real Estate:
  “You can make Excel do anything you want it to do… [but] there’s zero chance that the model I’m using is going to be accurate.” (27:42–28:01 | Shopoff)

Lightning Round & Final Thoughts (46:30–51:14)

• If Not Real Estate? Full-time scuba diver, or focusing on his environmental biofuels business. (47:20)
• Best Advice Received: The Golden Rule—"Take good care of people... treat them with regard to respect because you never know when somebody's going to be able to help you or hurt you." (47:57–48:24)
• Deal That Got Away: Had the land under contract where SoFi Stadium now sits—deal fell apart at the last moment. He’d even negotiated lifetime 50-yard line seats. (48:43–50:10)
• Upcoming Projects: New Las Vegas casino hotel opening January 2025, adjacent to Allegiant Stadium. (50:59–51:13)
• On Legacy: Shopoff’s children are artists; he considers real estate a creative field and expresses satisfaction in having “created on a big palette.” (44:47–45:32)

Timestamps for Important Segments

• 02:53 – Bill’s generalist business model and roots
• 04:41 – How Shopoff finds and filters deal flow
• 06:25 – Value creation across asset types
• 12:39 – Bill’s background and entry into real estate
• 18:20 – Pivotal and defining deals
• 22:18 – Is the “American dream” still alive?
• 25:42 – Skills and technology in real estate
• 30:05 – Diversified capital strategy explained
• 31:55 – Market shifts and deal execution realities
• 38:47 – 2023 market outlook and force sellers
• 46:30 – Lightning round: life, advice, regrets, and next big thing

Takeaways for Aspiring Real Estate Professionals

• Persistent networking, creative problem-solving, and adaptability are more critical than sheer intelligence or specialized technical skills.
• Expect setbacks—learn from failures, and maintain diverse sources of capital and information.
• Even in volatile markets, opportunities arise for those ready to pivot and act quickly.
• Treat everyone in the business well—the same people may influence your future deals.

Episode Tone

The conversation is candid, direct, with plenty of humor and humility—Bill Shopoff’s language is straightforward, occasionally self-deprecating, and peppered with anecdotes and actionable insight.

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