Mark Hanrahan is the founder and managing partner for Markmel Co, LLC. With more than 25 years experience in the fields of finance and real estate investments, Mark has helped with the growth of one of the Midwest’s fastest growing cities. Mark received his bachelor’s degree in accounting from the University of Northern Iowa, where he also gained hands-on experience by working as a staff accountant for Carney, Alexander & Marold CPA’s. While there, he specialized in auditing and tax returns. In 1991, Mark passed his CPA exam, to become a certified accounting specialist.
From there, Mark became a part of Principal Real Estate Investors, where he worked as a financial analyst for the next 24 years. While he was there, Mark developed several new databases, which strengthened their reporting process and made it more accessible. While working for PREI, Mark Hanrahan set out to earn his master’s degree with full honors from Drake University in Des Moines, Iowa. While working towards his master’s, Mark received a promotion to become the firms managing director of acquisitions and dispositions for the Western United States. Since taking on the development, Mark has overseen over $10 billion worth of property transactions and several joint-venture partnerships. He’s also a Chartered Financial Analyst.
Mark Hanrahan started Markmel Co. in 2009, as a way to branch out on his own and do business on his terms. His company specializes in venture capital that makes a difference in the lives of others. Mark and his family do this by taking complexity in today’s market and simplify them to make things easier to understand for startups and veteran companies alike. They work with startup businesses starting at the seed stage, and they also put later round investments into deep consideration. They also help those who want to purchase property invest in the right locations to make the most amount of money for everyone.
When Mark Hanrahan isn’t working, you can find him spending a lot of time outdoors. He loves to farm, go fishing, cycling, and skiing. Mark also likes to participate in triathlons, which he has competed in more than 60 times, as well as taking part in six Ironman competitions throughout the US. He also sits on the board for the Des Moines Triathlon Club. When he’s just relaxing, you can find Mark Hanrahan reading a good book, traveling around the country and abroad, and following sports teams from Iowa and Chicago. He is also a dedicated husband and father of one.
How did you get started in this business? What inspired you to start this business?
When I first got into accounting, I wanted to have a career where I knew I would have a pretty good chance of getting a job. As you remember, in the early 90’s, the job market wasn’t as robust as it is today. But I knew that accounting was a field that I knew would be marketable. When I graduated, I knew that being a CPA would be a baseline, but it also opened a lot of doors for me.
Real Estate, came for me a little bit later. But I knew once taking coursework that getting into the field had a lot of opportunities as well. I thought it was an excellent route to go so that I could expand my knowledge in several areas of my accounting skills and it went from there. I thought, hey, I can travel all over the place. So I began traveling around the country and meeting with different people in the industry. They taught me a lot, which motivated my efforts. I learned what made them successful and what didn’t help them so that I could learn the tricks of the trade. Over time, I was able to have access to all these data points of the ins and outs of the industry gave me the stepping stone to begin my own business.
How do you make money?
There are a few things I do, to make money with my company. Part of my business involves real estate brokerage, where I am helping clients and assisting them with space needs. But the real bulk of my business deals with creating properties, such as building homes or apartments, where I can generate cash flow. I partner with a company who can build houses, on any property that I purchase and then sell or lease them to make a profit. From there, I can either invest the money into another property investment or take the cash I just made.
How long did it take for you to become profitable?
This year has been perfect for the real estate industry, with the number of houses being built, and the economy is going well. But as you already know, it takes time to make a profit, especially in real estate development. Like the last two years I’ve worked hard towards making that goal to be profitable, and while I made money, I think 2018 will be okay.
When you were starting out, was there ever a time you doubted it would work? If so, how did you handle that?
When I was transitioning to become entrepreneurial, and starting my own development business, I would tell myself; Mark Hanrahan, you have the skill, you got this. But there are so many variables that can happen where it can make or break a someone who is new to this industry. For example, if you are renting properties and there is always that chance where tenants won’t pay their rent or the possibility of the economy tanking, which can discourage someone who is in the real estate development business. There are so many things that can happen, which makes it hard to measure success. The best way that I have handled these thoughts and worries is by keeping a positive attitude and keep going. Because to me, the silver lining to everything from our personal and business ventures lies within our beliefs and how we view our abilities.
You have to know when to analyze, and the right time to de-risk and to get there, you need to make educated guesses, along with your skill-set to make things work in your favor. When you sell a property, you are on your next strategy and you should be ready to take your subsequent risk to become successful as quickly as possible.
How did you get your first property acquisition?
I’m very data-driven, as you already know. So if the top-down, bottom-up approach does work out in your favor, then you see the macro-economy is good. Therefore you start asking yourself are there going to be users that want to be here? Do I have an overall plan and design that makes a lot of sense? So I’ll pick a product type in this case. I chose some local retail and industrial properties to start with. It’s my game plan and strategy to find the right investments around the metro region with the data I have available to me.
I want something that will give phenomenal growth prospects and the best overall traffic and that I could add value to by fixing the place up. That kind of value can add to an opportunity and make it one that you shouldn’t pass up. I am currently on three main developments going on right now in this area and they’re going quite well.
What is one growth strategy that you’ve used this work really well to generate new business for you?
The growth strategy that I’ve tried to take is less Marketing 101. I’m talking product, price, place, and promotion. The textbook strategies: we’re going to market this and tell everybody how great we are indeed. You want to be an asset to your customers, so others can recognize you and talk about how great you are. But the truth is, it’s really about attraction and not so much promotion that has helped us grow. I am more likely to sit down with you and come up with a solution and how we can help you achieve your resolution. I tell them great, I think you’ll like working with us, and if there is something that I cannot do, then I will be upfront. I am just not the type of person who pretends to be something that I’m not.
Over time, people will start recognizing you for the skill set that you have. We work with both tenants and other investors, as well as with the city. They know where our value is and sees what makes us attractive. It just kind of blossoms over time, and any new development that is happening that we are involved with, then the word spreads. So, for us, it’s along the lines of organic marketing and just word-of-mouth that has helped us bring in new clients.
What is the toughest decision you’ve had to make in the last few months?
As you might know, in real estate development, you tend to deal with a lot of greed from time to time. You’re always asking yourself with every investment, is it going to work out? Even when things turn out okay financially, how much doesn’t mean a lot in the grand scheme of things; so we try to take a different approach like singles and doubles are okay, but I’d love to help you get to home run. But you know the greed factor can be there. The best way to explain is my approach is like playing a hand of cards. If you have a winning side, you don’t have to press it, even though it could make things much better. You can give me all the money in the world but my style is along the lines of a bird in hand because deep down it makes me sleep better at night knowing that I’m honest in everything I do, and it also helps me stay in business longer.
However, there is a risk that one must take in development and there are always promises of becoming a millionaire are still a part of getting into this business, and at some point, someone will be burned. So you must weigh in your options, especially when it comes to transactions. Thus making the right decision can be difficult in any purchase I make because I want to make sure that I don’t get burned.
What do you think it is that makes you successful?
I put my success down to my formative years. My parents installed the kind of work ethic that has helped me push through when things are good and not so high. My drive to become successful has also helped me because it helps me reach each goal, no matter how large or small it is, and my competitive nature gives me the notion of staying on top of my game. Because you need emotional intelligence not only to handle deals that go through, but it is also good if you are rejected. I’ve also made my fair share of mistakes and missteps in life, but having some balance across all that and learning from those mistakes is what helps guide you toward success.
What has been your most satisfying moment in business?
There are a lot of deals that I’ve been involved with that involved sizeable real estate transactions, which have been very productive. That has been pretty satisfying overall for me. When I look back at previous deals, I have made and say hey that is great, that doesn’t always tell the whole story. I feel it is good to pay it forward and helped others because I’ve come across many people in my journey who have mentored me and shaped the way I do business.
What does the future hold for your business? What are you most excited about?
I’ve seen real estate, you know go through its ups and downs throughout the 90s and 2000s, and now the local markets for Des Moines are proliferating. There has been a lot of job growth, and a lot of people are moving to the area. It makes me excited to see our little part of the world finally get on the radar because it is a great place to live and work.
I remember when, you would tell someone that you’re from Des Moines, and they would ask, but what do you do there? I mean there are a lot of good things going on for the city in terms like for example if you are young, there are a ton of nightclubs and so many other things to do around the city. You can go to the theater and see Hamilton live and just so many activities that are diverse. You can use that to create an opportunity, especially if you are in real estate to create a path of growth. While places like California, Texas and Florida, along with other Sunbelt states get a lot of attention for job growth, there are tons of pockets in other areas that are either doing just as well or better than the Sunbelt. You go right through Des Moines if you are heading to the east or west coast on I-80 or if you are traveling to Canada or Mexico on I-35, and people can see the action going on around here.
What business books have inspired you?
Well, it isn’t exactly a book; however, it certainly helped me personally and professionally. The author’s name is Norman Vincent Peale, who passed away in the early 90s. The book he wrote that I am referring to is called The Power of Positive Thinking, and I think it was released in the late 40s to early 50s. It’s one of those feel-good books, which helps you out in many different situations. It teaches you to have a belief in something, and you’re a positive person. It shows you not to deal with the drama and focus on the good vibes. It honestly helped me a lot throughout different parts of my life.
What is a recent purchase you have made that’s helped with your business?
I have always had a love for technology, ever since I was 10-11 years old when the first computer came out from Texas Instruments. I was learning DOS and other programming tools, and though I am not a programmer, I like to tinker around with that in my spare time. Anyhow, there is always a need for real estate related software, like accounting and where you can list different property listings on a spreadsheet. Well, a while back, I came across and purchased software called Tableau, and it gives you the ability to have a spreadsheet that you can slice and dice any data you have on hand. Like for example if I am looking at certain pockets of real estate listings, I can plug in a few numbers, and it will show me everything I need to know, and it’s color coded too! It’s the same with anything I have made investments in, and that has helped me so much with keeping all of my data in check and to make sure that everything is organized in a way that will help my company continue to grow.