What if we re-imagined real estate development and put communities in the driver’s seat? Frolic, a new kind of developer, takes the cooperative housing model and adds an innovative twist. Learn about how Frolic started, its impact so far, and where it’s going next.
Frolic was a 2023 Ivory Prize for Housing Affordability Finalist for Finance.
Released in Partnership with the Builder's Daily
TRANSCRIPT
00:00
My name is Hannah, and this is the House Party podcast from Ivory Innovations. We bring you the top entrepreneurs, researchers, and practitioners in the industry to shine a light on housing affordability solutions.
Intro Music
00:24
HANNAH: I'm so excited to have Tamara Knox and Josh Morrison, the co -founders of Frolic, Frolic, on the podcast today. Frolic is an innovative real estate development model that uses the co -op structure to help recently up some communities keep and recirculate wealth within the families in that community versus risking displacement. To understand how Frolic works, let's start with a homeowner, Laura. Laura and her family have 350 ,000 in equity in their home that are struggling to keep up with rising property taxes and may have to leave the neighborhood. Laura partners with Frolic to raise $400 ,000 from investors and future residents and secures a $3 million construction loan based on the value of her land. Using this money, Frolic helps Laura build 10 units, $200 ,000 per home on her lot. Future residents of Laura's community only need a 10%, so $20 ,000 down payment to purchase one of those units. Once completed, Laura has a brand new home with nine additional affordable units. New families can move into Laura's neighborhood and build wealth, and Laura is able to stay in her home and receives a 9 % return through the co -op. This development model is very unique. We'll get into the details of their financial model in a bit, but at a high level, Frolic is able to support both homeowners facing displacement and provide affordable housing options. to residents looking to move into that neighborhood. This keeps wealth in the neighborhood and increases the supply of affordable housing. We don't see other organizations out there that are able to achieve both of these outcomes. It is for this reason that we were really excited by Frolic and nominated Frolic as a top 10 finalist for the ivory prize last year. Josh and Tamara, thank you so much for joining me today.
2:10
JOSH & TAMARA: Thanks for having us.
2:11
HANNAH: So you two first met on your first day of grad school at MIT. I know you both came to grad school hoping to explore some big questions around community development. What were those questions for each of you and where did this come from?
02:24
JOSH: Prior to going to MIT, I lived in Copenhagen and worked as an urban designer for five years and during that time I consulted on projects in Copenhagen. and in Australia and South Africa and the US. And something that I continually saw was how similar what was getting built in every major city looked, and how there is this prevalence of high -end luxury condos and these sort of soulless buildings. And I wondered a lot about why the built environment was moving in that direction. and when I studied architecture, there was kind of this idea that a lot of it is because developers are greedy, but actually it's so much more complex. And especially as I've done this work, I've gotten to know more and more about this system and structure that drives so much of the development happening around the world and especially in the US. And, you know, developers, when they want to build something, they need to go to the US. a loan from a bank. A bank, in order to give a loan, needs to hire an appraiser. And an appraiser, in order to come to their valuation, looks for what has been selling for the most money possible. And a bank is also needing there to be enough profit to give a loan to a developer. So this system is really built with an enormous amount of inertia with the impact. industry sort of churning out a lot of the same type of thing in cities and buildings and housing that really isn't serving people. It's much more built around capital and a place for people to place money and it's also really reinforcing a lot of the structural inequities that exist. history of segregation, keeping people who haven't historically had access to home ownership, making it even harder. It creates this incredible barrier to entry in cities of being able to afford to live there but then a barrier to stability of having enough wealth in order to buy and have a stake. And then I think a lot of the question that was driving the start of Frolic for me and and going to graduate school was seeing that there's this this inertia of the industry in a certain direction and believing that there's a way to divert that that there's something there's something else possible and wondering what development would look like if It was really driven by local communities and people had avoid voice in that and it reflected collective dreams that we have for the environments that we want to live in and And that's kind of something that Tamara and I really connect along we can talk more about this, but just this belief that Systems can do evil, but they themselves are not and that if you rethink the system and how it works You can use an existing system to do something much more just and much more beautiful Um, so I think Frolic was really like looking very deeply at the system and why it worked the way that it did
05:39
TAMARA: Um, just to add to that a bit. Um, I so before graduate school My work was kind of nestled within urban economics and urban planning and also worked for a developer and I think that they're Especially within the urban economics there's just, there was such like a question that kept resurfacing of there's this enormous amount of population growth happening on the urban planning side, a desire to add for more development. But this, like, not really much work or, like, hope for keeping the character of cities and, like, neighborhoods there. And so I think that, like, that just initial question, which I think, Josh, when you're saying, like, what happened when development is really driven by a community, I think that that in and of itself can start to shift, like, how can we have new development? How can we, like, our cities are going to be changing and there's this, like, flex happening. But creating the processes that, like, people don't have to get pushed out and they can be a part of that process and that there's just, like, the complication and the nuance of neighborhoods and typology and people interacting and like passing each other on the streets and like allowing for that complexity to still happen with this new development and then what Josh is explaining of like this like our current system is creating like a very certain type of product and it can feel very stale when you're living in a city so kind of that I guess so for me one of the big driving questions was how can you create a process for development that could allow for more dynamic projects to happen and to do it in a way that really helps people stay, imagine a future in a city, and the nuances of people interacting and small scale projects being able to flourish.
007:31
HANNAH: Okay, gotcha. So it seems like like you both came in with similar questions around like, how can we reimagine what development looks like with the community playing a very central role in that. You kind of both came to it from different angles, but like arriving at the same question. But also I loved what you said, Josh, about kind of thinking about the systems and not necessarily themselves as evil. but how do we maybe shift that inertia to push it in a different direction? So you had these kind of core questions around new ways of development, community -driven development. And you come to MIT. You two meet very early on, I think, the first day. And you start this student club called Pause. And I love the story because you've shared with me that the club would organize events. So like hiking, picnics, walks, basically things that would give you and your fellow classmates the opportunity to pause, to slow down, to relax. And I think I love this story because I feel like it really illustrates the approach that you two ended up taking when you started to build Frolic, you spent a lot of time researching, learning about the problems that existed within the system, within these real estate development models, and really dug into those questions that you had around development. And so you paused before you started to actually build anything. So I'd love to just hear more about that research and kind of exploration process. What did you learn through that?
09:16
TAMARA: I think one of the things we learned was the importance of going through it and the importance of continuously going through it. That's something that we find to just be deeply important to this work is like not coming up with an answer that stays the same. And so, okay, so a lot of the research was talking to people and listening and talking to people. many different types of people and different types of stakeholders that all like come from different industries, come from different neighborhoods, come with different versions of power and like honestly just dreaming with them and like having like big open brainstorms of like what would you love if anything could be possible? What would it be? And then like what do you see from your position that would be stopping that from happening? and I think cultivating that really kind of like open exploration we were starting to see very similar patterns coming out from people from like we're talking about like lawyers, banks, developers, neighborhood community groups, neighborhood associations, architects, just like a huge variety of different types of thinking that touch neighborhoods and lives and lives. the real estate process.
10:30
JOSH: I think I mean one of the one of the big learnings for us was I feel like an old mentor of Tamara gave us this image that really stuck which was like what you you know this was later in our process where we started having the early ideas for for all like outlined and what he shared was like for you to do what you're trying to do you're gonna have to create this three-dimensional object that when I look at it from this angle, it looks like an A, but if I look at it from this other side, it maybe looks like a C, and if I look at it from here, it looks like an E. It's like a very complex object, but when I look at it from my view, I see something I really recognize and that feels familiar. And in order for what you're hoping to do to work, you're going to have to make something that lenders see as safe and that feels familiar to them and that cities see from from their angle as something recognizable and That…
11:27
TAMARA: You know, achieving their goals as well and like aligned with what they're going for.
11:32
JOSH: mm -hmm And I think that's like that's been such a strong undercurrent is And especially in our work now, and I'm sure we'll talk more about this But working with a lot of more grassroots oriented organizations that really represent and know the needs of specific communities and neighborhoods, and can speak to populations that have been marginalized for throughout most of the US history, and to the ways that the system is failing, and know very clearly what their community needs, but unable to speak to populations that have been marginalized. lending or capital, which really drives a lot of the real estate process. And so kind of this importance of really understanding that lens, not vilifying it, but understanding it, and being able to translate a vision or a dream of a community into something that can fit into a box that might feel conventional to a certain audience, but actually is doing something that very different and serving a very different purpose. And I think that sort of like, we talk about like translating, like being able to speak two languages and allow people to dream, but giving the tools to kind of see what's possible and not be stuck in a certain idea of what has been done before. I think we also were really struck by certain, like, examples we found, um, in different parts of the world, um, ones that stand out, um, one is this world. worker housing that was built in in Denmark in the like in 1800s where you had a union that like a trade union where no one could get a loan from a bank because there were no banks that gave loans to poorer people and they bought they pulled all their money and bought a plot of land outside the city and they started putting money in a bucket, like 300 families. Every month, they put a little bit of their earnings aside. And once they had enough money in the pot to build the first two homes on this plot of land, they would draw straws and they would build the first two homes for two of the families. But everyone kept paying into this bucket until, you know, 20 years later, everyone had a new, had a home and, you know, built this whole neighborhood. They self -financed and Now it's like one of the most attractive parts of Copenhagen the Potato Rows, but just that like this idea that the power of community and the assets that exist within a community that are That like just need a way to be used or collected or But currently are kind of not tapped. Like how much power exists within a community. That definitely left an impression on both of us.
14:38
TAMARA: Can I add it as small?
14:40
HANNAH: Yeah.
14:41
TAMARA: I'm just reflecting back to Pause our little student group. (Hannah laughs) And I'm realizing that so I think a lot of its purpose was to create the space for for people within our program to just like reflect on why they're there and what their personal goals and dreams were instead of just getting kind of swept up by the insanity that grad school can be. And I just, Josh, I'm kind of just seeing how much that plays into the work that we do and working with homeowners and local community groups of just like really understanding what they're doing. what like what their dreams are and articulating it and so as Josh is kind of explaining this translation of you know what what what you dream to create for like your home in your community but then interacting with the larger systems I think making sure that that very like authentic truth of what what you're really wanting to have be made remains there instead of of continuously being adjusted by the needs of the system. So I think there also was a lot in having that thread kind of play out for our work and a lot of what I believe brings us to it.
15:58
HANNAH: Yeah, I kind of want to dig into the being swept up by the insanity of grad school thread. And Josh, I was really struck by the metaphor, I guess Tamara's mentor had shared with you too around this three -dimensional box and being able to look at it from these different angles and having it ring true from that vantage point. And I think being able to build something like that, it makes sense why you had this intensive research, very intentional research process. I'm curious like at a, I mean in grad school and especially at a place like MIT there is this kind of fast -paced intense culture and being a startup, there's also sort of the like move fast and break things kind of mentality and the way that you to thought about the concept for Frolic and getting to that concept was very much the opposite of that. And so I'm curious, what was it like kind of being in that? environment and taking such a different approach to how you started the business?
17:04
TAMARA: First of all, it's very hard. I think it, but in its difficulty, it is a big thing that I think solidified us as partners, as founders. And I think seeing the truth that I think it's a big thing that I think it's a big thing of both of us in not getting swayed by it and not wanting to get swayed by it and working hard to do that, it just really, it proved our commitment to addressing like, our cities are complex and our issues are complex and the solution is not going to be simple. And there's just, it's really not like to understand. that and to really understand it and to fight for that. I think it it's something that It was kind of like I think one of the initial fires that we really built together and something that we continue to cultivate… and Josh do anything to add to that?
18:05
JOSH: I think it was very trying and like we learned so much about ourselves through the process We were part of an accelerator called design X at MIT, which was, you know, a semester long and meant to be like a mini MBA, like get startups to a place where they can get investment. And like, and we were kind of their wild card. Like, Frolic seems really interesting, but they don't know what they're doing yet. Like, and the whole time we were very much on a different track than the others. It's like, we were much... more focused on understanding the issue that we were trying to solve, then on creating a quick widget and like concept. And I really was grateful for the influence of Dana Cunningham at MIT who ran Colab at the time and taught a class called participatory action research, which is just a concept that, you know, like, the the failures of our current system in the way that the structures that our society is built around are oppressive, like to understand them and to fix them, you have to really like people who are living at the margins of society know these failures best and their lived experiences like an invaluable asset and creating any sort of solution. And that to create like meaningful change is not about like a widget, but about like like about very deep listening and exploration and curiosity. And I think she helped at least, I think she helped us like feel confident in our path of moving slower and keeping our eye on like a more deeper, more holistic prize of more fundamental change.
19:53
HANNAH: Yeah. It's fantastic. So I want to, you know, we've talked a lot about kind of the steps leading up to building the design for Frolic thinking about the concept. So let's talk about what you actually did end up designing with Frolic. So I shared in the opening that the ownership and financing model as part of Frolic that you've built allows people to buy homes. with down payments as low as 20k. So I know there's, you know, even the like metaphor with the different letters of a different box. The financial model is complex. And so can you just kind of walk us through like, how do we, how do we get to that 20k?
20:34
JOSH: Well, so in thinking about how, how the model works at kind of a high level, it's really built on this, on co -op. as an ownership structure. Co -ops are something that existed a while ago. There's a lot in New York. There's some on the West Coast, but not so many. The ownership system predated condo law. So once condo law came about, people stopped building co -ops. So we haven't seen many new co -ops built in the last several decades. But there's a lot of legacy products that exist back from when co -ops were more common in the country and for the co-ops that do exist. And basically what is incredible about a co -op structure is that it allows for an entire project. So you think of an example project that you spoke about 10 units, the project cost 4 million dollars, you know, if it was a condom, condo, you'd have to sell each of those homes for $400 ,000 But as a co -op, you can take what's called the blanket debt. So the co -op as a whole can take a mortgage ,can take debt, that's secured by the entire project. It's not, it doesn't look at any individual owner. It's just a loan to the project as a whole. And that can be half of the total value ($2 million). So you have a $4 million project, $2 million is debt that the co -op is taking as a whole. And then the other $2 million are what are called resident shares, so a resident share in a co -op is a proxy for home ownership. You buy a share of a co -op and that gives you the sole right to live in your home. And you can get a loan to buy a co -op share. Those loan products have existed for a long time. We've done a lot of work to bring those into new markets. But basically, that allows you to get a mortgage on your share. And those all add up, you know, 10 homes. Now each home is $200 ,000 instead of $400 ,000 because it just needs to add up to $2 million. The other $2 million is debt that the Co -op is taking as a whole. $2 million are all the mortgages added up, each of the resident share loans. And you only have to put 10 % down on that. So that's kind of how you get to that average of $20k.
22:47
TAMARA: So there's there's two parts of the process. The first is how do you develop the project? And then the second part is once the project is built, how do how do you break up ownership in a way where you can buy a home with $20 ,000? And so that's what Josh is explaining. And then I will say too that then everyone moves in and let's say it's five or ten years down the line, what happens to the project then? So making it really easy for a homeowner. to then sell their home and to build equity while they own it, to ensure that all of their monthly expenses aren't going to rise by more than 3 % a year. And kind of making sure that once the project is built, the project as a whole is really financially strong. And so it's able to navigate taking care of the residents, but then also interacting with these overall capital markets. markets and being able to refinance and kind of just really maintaining the value of the asset. And then the lovely home for people that live there. So there's like the soft reality of this like beautiful home where there's like thoughtful design where people are able to interact, really share space together. And then like the thoughtful physical design is really pairing with them the thoughtful financial design to make sure that the project is strong and safe and wonderful for everyone involved.
24:11
JOSH: Just to illustrate the power of that tool and thinking about time, that blanket debt that's used to make it possible in the beginning, it can be used in 20 years when the co -op wants to replace its roof. So instead of a condo, everyone has to chip in $10 ,000 in order to replace it. siding or the windows. A co -op can finance that over 30 years with a mortgage, with a conventional mortgage product, the whole co -op takes. So instead of having to pay for it at once, it's spread out and it's financed. So it makes it, it makes, you know, older co -ops are extremely powerful financial vehicles and they're able to maintain and improve the property over time. So you see like, you know, old co -ops where they paid off all their debt and since then they've added balconies. And they've they've added insulation and they've have you know top -of -the -line windows and like the buildings just keep improving because it has this it can take advantage of outside appreciation and use and And use that tool that that are unique to co -ops of blanket debt.
25:10
HANNAH: Okay, so it sounds like sounds like the like kind of crux of what makes this whole thing possible is that it is unique initially set up as a co -op and therefore you can take out that blanket debt to finance the project.
25:25
TAMARA: And then the way that we've organized like this, I mean, this is like going down to the weeds. So I won't go down there, but a lot of what are, which is hard for me, I guess as Josh was talking about this refinance event to, you know, roofs fall apart and you need to replace them, making sure that that isn't reliant upon large appreciations in value of the overall market or of really dramatic increases in income. And so that's a lot of like our nuanced work has been ensuring that the way that the co -op functions over time is, it's able to go through that refreshment. event without relying on really extreme external factors.
26:09
HANNAH: So for this to work you need existing homeowners to be interested and invested financially in a project. So how exactly does that work and has that been a challenge at all?
26:19
TAMARA: A lot of what I thinking has been and what we've worked hard to make happen is like the question how do you make projects work without an enormous amount of capital and And so for us, like a really big part of our model is partnering with a property owner that owns a home on land that can add more density on it. I will say it doesn't require that. So there could be a conversion or if there is the capital, there could be new construction without an original homeowner. But like so much of the beauty that I think really resonates with the two of us when we think about the like how we're shifting the way that real estate can happen in the country is through the partnering with the property owner. So a lot of like an enormous number of property owners that are coming to us, especially in neighborhoods that have been up zoned. So all of a sudden the city has allowed for more density to be built on their lot. That inherently means that their land is worth a lot more money. And so the equity that they have in their home, they're able to kind of contribute that to a development entity that then will construct and build the project. And because they can contribute that, the equity in their home, and we can pair that with other capital, we're able to then use those two pieces of equity to then leverage just a very conventional construction loan. loan. So you're with this, we're allowing a homeowner to really drive development, use the systems that are already existing of construction lenders working to build new projects. I think that like then the question is like why, so why would a homeowner do that? I think part of it is like the reality that owning a home is really, really hard and expensive and it's first of all, it's just difficult. And if you have a lower income, the money that you need to be improving it over time, it's quite a bit and it's scary. So there's a lot of people that are holding onto property that are really losing its value over time. In certain states like Washington State, which we're right now, we're located in Seattle, the property taxes are increasing really rapidly rapidly. homeowners that are living on these up zoned, up zoned parcels. So I think I'm thinking of like Mary as one of our homeowners, her property taxes have just like skyrocketed in the last handful of years because of this up zone. And so she's in this very, very tenuous situation with her home and there's really, I mean, she's getting, developers are craving this land. They want, to buy it. They want to go build their townhomes, make a big profit margin and then leave. And so, but for her, we're meeting with her and we're like dreaming with her of like, what does she want for her life? She like, and like community and to be able to, for her to be able to like take the land and the home that she has and have that actually be useful to build a project and be like, to be able to leverage just the systems that are existing around her. her that right now they're just kind of inflicting themselves upon her, but now she's able to actually like use them for herself. I think actually, yeah, Josh, you have an image of the project behind you.
29:35
JOSH: Yeah, and just like to add context, you know, if the other developers that are approaching homeowners like Mary or other homeowners on our wait list, they will buy her home. for mostly its land value. They're going to knock down her house. And so her land is worth around $700 ,000. And then they're building town homes that are selling for well over a million. So she can't afford anything getting built in her neighborhood if she does sell to one of them, which puts her in a position where if she sells, she has to move pretty far outside the city. And a developer, when they buy her a lot, and this is kind of what Tamara was sharing, you know, they, they spend that $700 ,000, they then go to a bank and say, look, I've put in this much money. Now I want to build this project, let's say 3 or 4 million. Can you loan me the rest? And they show the value of the land as being like a big part of their contribution. That makes the bank feel comfortable to loan money, but Mary is not in a terribly different position. as one of those developers. She's just not a developer and she doesn't have that expertise. It's a lot of what we're doing is allowing her to do what other developers do, to leverage the value of her land and get capital in order to redevelop it. And that's, and for us, that's like a bigger picture. It's like, when you rezone land for greater development potential, it creates all this new potential value, but that value is a exists once something is built. And so conventionally, it's developers that then extract that value and benefit from it. But we believe if a community can own that process and benefit from that new value generation, all that new wealth can stay within a community. And especially in areas like in Seattle, the Central District, that's historically redlined where you see just mass displacement of people of color. color being able to keep that wealth within communities that historically have been stripped of wealth is like the great potential of what we see the rezone being in every city across the country is like how do you create this new value but then then contain it within a community. Yeah, I got, kind of, went big. (laughs)
31:53
TAMARA: I feel like you know it's like and then that's where the co -op comes in and having having the low down payment and all of a sudden so it's like there keeps being new wealth that gets created by the product and if you can allow for like people that have been renting within the neighborhood and never ever dreamed of being able to own a home and all of a sudden they can buy their this home that gets built and they've been living this community for a long time. now they've really like secured their place in it. They can then start to be the people that are like, I guess I'm lost my word, but like gaining the wealth that gets created.
32:31
HANNAH: Beneficiaries.
32:32
TAMARA: Yeah.
32:33
HANNAH: Yeah. Yeah. Absolutely. No, I mean, it's an incredibly powerful model and all kind of within the same system, you know, like following the same set of steps but just with different players kind of moving it forward.
32:49
JOSH: I think it's helpful to just illustrate how it works economically for Mary is that currently she's paying around $2 ,400 a month on her mortgage, living in a home that is not in great shape. And when the project is complete, she'll have a brand new home, her monthly payments will go down to $1 ,000. She'll have a new home that's worth $300 ,000 and her original equity was around $450 ,000. So she'll get a new home and then she'll get the rest out as cash. So she'll have $150 ,000 of cash and then she'll get around like a $40 ,000 to $60 ,000 return on her contribution to the development as an investor in the development process. So she's getting this chunk of cash of around $200 ,000 that is kind of her nest egg for retirement. So for her, it's a way to stay in her neighborhood, to get a home that meets her present needs, to reduce her monthly expenses, and to take out some of the equity from her land, and to house a lot of her friends and neighbors that have been displaced from her community.
33:52
HANNAH: You have four active projects in Seattle and several more in the pipeline. You've received some grant funding resources to expand to California, so I'm curious to understand what's the vision for how Frolic grows?
34:05
JOSH: Well, there's a lot. We're imagining, you know, if we think 10 years from now, our dream is that thousands of families and households and people that are currently excluded from home ownership can buy a home in a future Frolic project. and start their journey towards building wealth and a financial legacy for their family, but also on the bigger scale, start creating a more inclusive middle class in the country. We think about neighborhoods that are going through so much transition. We've had huge upzones in Washington state, in Seattle, and soon in Washington state. We're seeing a lot in California and in Oregon. And that trend is moving slowly. across the country. And that, you know, all these neighborhoods, this opportunity where you have this new value that's created when the land is rezoned. And rather than all of that new value going to outside developers and being extracted, that that value stays within a community and grows the wealth of that community. So this really is like an opportunity to build a more inclusive middle class, but also creates cities that are more whole and neighborhoods that are more whole with people from different socioeconomic groups that then have a place and have access to security and stability and the ability to plant roots in a neighborhood.
That's the bigger picture and how we get there. Our vision is really that in these first few years, the next few years, a lot of our work is on demonstrating our model, creating projects in new new geographies, and showing how it can work. We think of this as our sort of development lab within Frolic, where we showcase the projects we co -develop with partners that, you know, we already have relationships and we're building relationships. You mentioned the grant where we've gotten in California due to the Trans -Arcoburg initiative to expand, and that we're, you know, working with really wonderful organizations that we hope to build deeper ties with, that we believe can be building the future generations of Frolic projects. So our development lab is working closely with our co -development partners to build these next generation of projects, but we see in five or 10 years from now that we have this larger network of organizations and individuals and developers that we've vetted and that are licensed to use our model. We provide them with the entire ownership structure, the legal documents, the financial models, the wait list of homeowners and our buyer pool. And basically reduce a lot of the friction and the difficulty of doing development and allow all of our partner organizations, all of the developers and people we work with to build out future Frolic projects where our role becomes more and more over time, providing support to those organizations and providing the tools, but not doing all the development ourselves. So a much more sort of emergent process of scale.
And that also is really defined by the dreams and ambitions and needs of the communities where these projects are emerging and coming to being.
One metaphor that we really like is this idea of making a meal. And you think of the current real estate industry is maybe cooking the same meal that we're all kind of sick of. And a lot of our work is creating some different ingredients, some different recipes for those ingredients and allowing other people people to, you know, use the recipes, riff off the recipes, but basically have this new set of ingredients to make meals that are delicious and represent, you know, a local area, what makes sense in a specific place. Not all Frolic projects will look the same around the country, but there's these new tools that haven't existed before that communities can now start to own. you know, a local area, what makes sense in a specific place. Not all Frolic projects will look the same around the country, but there's these new tools that haven't existed before that communities can now start to own. more of the process. So that's our vision for how we grow.
38:10
HANNAH: I love that. Thank you, Josh. So for my last question, I usually ask about how people can get involved and learn more about frolic. And I know for Frolic, you all have a broad ecosystem and coalition of support that you've built. So there's a lot of different ways that people can be involved and support your work. I'd love to just hear more about what that can look like for folks that are listening and want to get involved.
38:38
TAMARA: So as Josh was explaining our path to growth and kind of thinking about what, like how we imagined our model being replicated and being used in different ways across the country, you, it's part of what's doing, so he's also just talking about this like larger ecosystem that we're creating and how it's being developed and how it's being implemented, can span within different communities but you what's really important is also creating a really strong ecosystem within each each each region each neighborhood each different community and a lot of what that takes is helping organizations and kind of a different type of developer to start to emerge and someone who really like knows their community well knows their needs is going to be looking out for them and also like like seeing if a future for themselves and really working within this realm of creating homes and creating neighborhoods. And so a lot of, like seeing if a future for themselves and really working within this realm of creating homes and creating neighborhoods. And so a lot of, I mean, we've been, Josh, I've been so blessed in our journey of having incredible mentors in really teaching us the role of development and that and like stepping into this and really understanding that system. And while Frolic will be providing a lot of a lot of the tools and the processes for that, what we're really dreaming of is having local developers really act as mentors to this like next generation of developers coming up.
So I guess like for those those listening also if you're at a stage in your life where you've gained an incredible amount of expertise and thinking about really your legacy and passing that down and sharing that knowledge what we're what we're creating is or what we see ourselves creating is these really training cohorts. And so collecting when people are coming to us and saying we really want to learn how to do development, you know, local organization that knows the community wants to step into really creating spaces. They're able to join this cohort of others and then be set up with a coach and a mentor and something that the simplicity of like meeting once a week or meeting every other other week and just asking dumb questions. And that's something that is so crucial in learning a new skill set and walking into a new field and making sure that you're not just posturing.
And that's like an inherent part of it, but it's really important to have a vulnerable space to be yourself and understand like really, what am I trying to gain out of this? And how do I let my own experience and beliefs and knowledge really match these systems that might feel really antagonistic towards them and creating those bridges. And so there's kind of like the general infrastructure and then there's really that softness and that mentorship.
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JOSH: It's also one of the things that's like dearest to our heart, what that process looks like. And just the humanness, I think of how we see growth after it. that it's, people often talk about scale as just growing as fast as you can, and we really see it as a relationship-based process, and that that doesn't need to be slower, but it's more meaningful and more connected to individuals. In addition, I would just add, right now we have far more demand than our team can handle. We have 48 homeowners in our pipeline that wanna do projects on their lots in Seattle. We're building out a wait list in California. We need to hire more staff and grow our team and we're raising operational capital. So, we're looking for partners in that.
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TAMARA: So as we're, over the years, we're gonna be doing these various raises and really building up the capital for different developers to do projects and for us ourselves, we're doing. like our next batches of projects and what I guess a big ask is is if anyone's listening and you know high net worth individuals family offices wealth managers just we're designing these products right now and really trying to make sure that they are appropriately designed to what is being really like craved by the investor community And a lot of our focus thus far in kind of, I mean, you've probably heard it in various parts of this conversation over the last hour, but really working with reducing the risk to real estate investment and that you'll find that in the different products that we've been creating. And so I guess if there's also just, if you're trying, if there's folks listening who are really thinking about moving more their capital into real estate, but wanting to make sure that it's moved more into a lower -risk product, it would be great to just be in conversation and understand what kind of like what your dreams are for that. And so as we continue to be building out these products, we can be fine -tuning them and making sure that they're, you know, matching the world that you're confronting, capital gains, taxes, all these things. And yeah, so.
43:43:34
HANNAH: Josh, Tamara, thank you so much for joining me today. It was fantastic to learn more about your journeys and the Frolic story. So thanks for being here.
43:44
JOSH: Thank you so much, Hannah.
43:45
TAMARA: Thanks Hannah
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HANNAH: Join us next week to hear how one team wanted to change who had a seat at the table in the construction industry. Since then, they've helped over 100 ,000 women. women -owned and minority -owned firms get connected to real estate development projects. That's all for today. Thanks for listening to House Party with Ivory Innovations.
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