Position: President
Company: Rule Enterprises LLC
What it does: Commercial real estate development
Career: Brandon Rule completed Marquette University’s Associates in Commercial Real Estate (ACRE) program in 2010. Following graduation, he worked in personal banking for PNC Bank, and continued to pursue real estate research and networking outside of work. In 2015, he began planning an affordable housing development in Milwaukee’s Walker’s Point neighborhood. In July 2019, SEVEN04 Place – a 60-unit affordable apartment building, developed by Rule Enterprises LLC and Impact Seven – opened its doors. Now, Rule has more projects in the works, including another affordable housing development in Walker’s Point, and developments in Madison and Washington, D.C.
The challenge
“The biggest challenge was access to capital. I face it even now on current projects I’m developing, but specifically for SEVEN04, being able to find the capital to get it under site control, that was a huge barrier for me. Even though I had the thought and wherewithal to develop a project … being able to find $25,000 to get a site under contract was a significant hurdle I had to overcome. This project was close to $350,000 in pre-development expenses prior to closing.”
“It was that much more difficult, being young, black and new, attracting pre-development dollars, even for something as mission-based as this was – providing quality affordable housing options in the neighborhood, giving people who are facing homelessness a place to live.”
The resolution
“I had to truly pound the pavement and convince people of the mission and show the value and how it would be executed … It was leveraging resources, twisting arms, pounding the pavement and identifying people who believed in the vision enough to give me a personal loan. They weren’t friends, they weren’t family, they were business acquaintances that I had to create enough value and pay a premium on the returns through the developer fee I was projecting.”
“I had a few local (community development financial institutions) support the project. LISC provided a recoverable grant of just shy of $30,000. Forward Community Investments gave me a pre-development grant to the tune of $50,000.”
The takeaway
“The No. 1 lesson is perseverance. That’s my favorite word. When you have a sense of perseverance, you can accomplish pretty much anything you put your mind to. But in terms of business lessons, I learned that it will be more challenging for a newer minority developer, and that’s just a fact. The process of development is extremely difficult and to have to deal with additional pressure of pre-development expenses and access to capital, this makes it nearly impossible to penetrate – which makes sense how few African Americans and developers of color you see across the country.”
“There are great deals that can be done with simply an injection of capital. These deals are extremely meaningful and they provide very favorable returns to all parties involved. I really want to empower the people that have access to capital and show them by taking a chance, you do still get the returns that you would get from any other type of project.” n
