Episode Transcript
Speaker 0 00:02 Welcome to the untold stories of real estate investing hosted by Wayne courageous, a third, a place where active and passive investors come to hear the good, bad and ugly of real estate investing. Our guests consist of experienced operators and investors who want others to succeed by sharing their stories. If you're looking to send the key deals or grow your wealth passively in real estate, you've come to the right show. It's now time, sit back, take minutes on notes and enjoy our next episode of the untold stories of real estate investing.
Speaker 1 00:39 Welcome to the untold stories of real estate investing. I'm your host Wayne courageous for your next episode, we are excited to have Benny smile Chopra. Originally a mechanical issue
Speaker 2 00:47 Here from India is a taught multifamily investor and syndicator with over 40 years of experience in real estate, as a multifamily syndication expert, he has facilitated over 29 successful syndication deals. He has acquired as principle and key sponsor, a very successful real estate investment portfolio worth over $350 million, more than 4,300 doors under management. Vinnie is an international bestselling author and host of two podcasts. He holds an MBA from George Washington university. There's a reason Vinnie's name is mr smiles, which is evident even through just hearing his demeanor in his voice. He's a strong believer in the power of an individual's ability to shape the world around them through positive thought enthusiasm and selfless actions. His latest passion is to develop and build luxury assistant senior livings multifamily, and a great partnership. And let's welcome. Vinny smiles. Welcome Benny.
Speaker 3 01:39 Hi. Hi. So glad to be with you. This is awesome. I can't wait to really give the nuggets and keep on asking and give it great material for your audiences. Thank you.
Speaker 2 01:51 Thank you. Well, you know, we just kicked off our podcast, so thank you so much for your time and being willing to share the good, bad and the ugly. But first I want to start off by saying, I really enjoyed reading your book. Apartment syndication made easy. I will say your experience and willingness to teach others is extremely valuable for our real estate investor group. So let's start by your story coming from India in the 1970s, I would just $7 in your pocket from that time to today. Yeah, you've grown an investment portfolio over $350 million a lot to be grateful for. And I know success didn't come easy as there's a lot of hard work right in real estate syndication, but as we discussed the good, bad and ugly of your experience in real estate investing, what do you see as the good of real estate investing for those getting into the industry, both from an active and passive investor perspective?
Speaker 3 02:39 Sure. When you know the biggest thing I'd like to tell your audiences that I started very small, I had single family homes, like a lot of people start with, but when I was learning my type family and I chose that fee for the purpose, because as an engineer, it just made sense to me rather than having moms all in many, many States, you know, to have them under one or two roofs and they kind of condoms of scale will help and we can collect rents faster, things like that. But the biggest thing is I bought my 14 unit apartment $480,000. That was my start in the crash in the recession of 2007, eight and nine. So I'm really fortunate that I stayed the course and I just kept on plugging away, plugging away, plugging away. You're right. It's a lot of hard work. You know, the iceberg, when somebody looks at the tip of the iceberg, that's just the success we see, but we don't see under the level, the seawater, how much hard work has gone rejection, uh, ups and downs in anybody's life. Right?
Speaker 2 03:48 Yeah. So I mean, obviously a lot of the financial benefits for you and your family, what other things would you say somebody getting in on an active and passive side are good benefits and multifamily in your experience?
Speaker 3 04:01 Totally. You know, active, meaning like they're buying an apartment complex. Right. And I always tell my students also to go small, to get going, right, get it duplex. See when you get a fourplex, get eight Plex, 16 Plex. But the big thing is the more bigger a number of apartments units go. It gets easier and easier and easier. But the biggest trouble I find is that people are not able to scale up fast by their own money. He just the truth. You know, how much can we buy? How much can we spend our own money? That's what I got caught on in the early stages of my life. I said, Oh my gosh, I need to learn, how could I buy more apartments? And that's when I was dropped this in a word syndication, which is pooling of the money together legally to a common goal and then making profit for the investors. So I became syndicator. And fortunately I've done all 29 DS as sponsor as a principal as being on the lawn on all 29. So I've never been invested at all. I've never invested in LPDs at all limited partnership.
Speaker 2 05:18 So you have not invested any, any passively, it's all been active, active deal. So you've been the one who found the deal, underwrote it, and now you manage it. All, all the properties are in house management.
Speaker 3 05:30 All of our assets are 29 of them. So we started my old company, ideal investment group, 14 syndications I did in that one, like in Odessa, Midland send, Mark has very, you are in Austin, right there, Seguin San Antonio. Then I opened my new company five years back on leap and we have done 240 million in that one, just in the last four and a half years, more knee investment group and be managed vertically aligned. We have property management companies in both sites. So everything is self map.
Speaker 2 06:04 Remind me, do you do class a and class B only? Or do you go into class C and what, what's your, uh, property type?
Speaker 3 06:12 Nah, let me kind of share with all your audience. The biggest reason I did C C minus and C in the early years, because I could raise money, you know, and when you start very small, you're just trying to make one investor at a time. One second, third, you know, with the grace of God, now I have 168 investors who have built with me over the, over and over and over and over again, you know, and I've doubled their money, triple their money, things like that. They are happy. So now I can raise more money so I can buy B class B plus a minus assets. Like last year we bought 35 million with a joint partner and similar type family and 52 million. So it was big one from a 14 unit, 180,000. And we were buying CCC C minus value, add for many, many years. And that's how everybody should get started because there is a big value add and you can make jumbled the money triple the money sometime, you know, but then when you can raise more money, that's what the power of syndication is. Now your two most stable, the plus assets. That's where we are.
Speaker 2 07:28 Yeah. I would say w uh, the barriers of entry right. Are easier to get in when you're dealing with smaller assets and there's less competition, or the C C minus you're dealing with a lot of the family owned properties. Yeah.
Speaker 3 07:43 Lot more.
Speaker 2 07:44 So we hear a lot of the good and part of the reason I started this podcast is really to hear about an ugly. So with 29 syndications all active, I mean, it's not all smiles, is it?
Speaker 3 07:56 Oh,
Speaker 2 07:56 So I really want to hear, you know, and this is, you know, I do it for myself, this cause I'm, you know, I'm learning from, you know, people that are experienced like yourself is, you know, what are the bad, what is the ugly that you have gone through? Just so people can see that it's not all roses and all good.
Speaker 3 08:16 You know, I really do. I know I wrote that book, you know, apartment syndication made easy, but more and more I read about it. And a lot of people, they tell me about it. They say Vinnie is not that easy. And I have to agree with that because it's got spinning of lot of plates. As I discussed in the book, I would say the hardest part, which I was starting out as a new investor, was my track record, no track record at all. So that was big thing. People we lived always in California, near San Francisco. I never wanted to move back to where I'm purchasing. That was a drawback, big drawback banks wouldn't give me loan. They would say, I have to live near by the property, 15 miles away. And then the money dried up in the crash. I addressed million point something by the Monday morning, Friday, the crash was 854 points. I remember, and I was ready to buy this property. It was fully real, actually possessed by the bank. And they had worked on it for, I think, about two years or so to bring it back to life two years or something, one year and stuff. And then we were going to buy it. Contract was on my table, but my money dried up, Oh my gosh, I couldn't buy that property near Dallas.
Speaker 3 09:41 I wished I had bought that. We would be, you know, a lot high, but the thing is due diligence. Oh my gosh, I can go. I can write a book on it, not running the cameras through the sewer lines that caught me and caught. I didn't have to pay $200,000, right when I bought the property near Nessa. And I couldn't believe with beautiful property, everything was great. The seller put in 2.6 million, what do you mean 2 million into renovation of interiors and balconies and everything. But guess what? They never went under the ground. And that's where the rock iron pipes were all broken and they were smelly and all that. They were doing some chemicals in it. So a lot of trouble, you know, and then one property I bought in, uh, San Antonio. We missed the foundation who are trying to cut corners in not getting these foundation.
Speaker 3 10:39 People come in there. And so when we bought the property in about four months or so, we started seeing this something happening and it was a chiller system. So the water pipes coming through, they bursted, it was mess. I'm telling you and my investors were, thank God. They were nice people. They were actually attorneys. Can you believe friends, attorneys? They joined together seven, 800. I raised, I would deem a very kind to us. We meet every two weeks, my partner and I, and they were very happy that we did everything. Then we gave them 8.5% return after we sold it. We give them cash and only one quarter, but two and a half years, no fashionable. Wow. You know, so those were bad things. Lots of, you know, contractor I can think of who have taken me to court because they didn't do a good job.
Speaker 3 11:37 I need paid. Not lot. Maybe one, I should say, uh, sorry about that. But you know, this was a burned building. I bought, eh, in, in Texas near Freeport and I bought it as a C minus. I turned it into, bought it for 3.5, five zero, sold it for 8 million, 8.5 actually made good money for my investors and me also, but it's a lot of hard work in there. A lot of problems, lots of demographic shift people leaving and I'm in. So there are lots of negative things I can talk about as a sponsor. But if your attitude is right, if your mindset is right, you say, you know what? Every situation has a solution. Every challenge has a solution. Every problem I never look at problem. I just see, okay, what's in the best interest of the investors because investors are gold. Residents are gold.
Speaker 3 12:35 Our team members are good. Those are the two people right in the chain vendors, our vendors, their families, their businesses. And then we are the fourth ones at the bottom. The key thing is if we have that in our mind, always I have made decisions totally based on those for models that I have, mission statements I have in the company. The key thing is, even though you may lose some money I'm in, sometimes we have given over property management feedback into the LLC to give out to the investors, the cash flow for the quarter makes it a little bit sweeter for them. Then, you know, they would have gotten so little because some of the investors are retired people, right? And they're counting on that money, you know, and so forth. And then investor meetings doing that communication is so humungous in my books, you know, because people want to sleep good at night time and they can only sleep good at night time. If they know that you are transparent, that you are able to provide them everything they need in a very short period of time. You know, we, our response time is like within an hour to all our investors. And they have told more people and more people and more people. And that's how we have built out 168 investors, but I can raise four or five, six, $10 million now from that same pool again and again.
Speaker 2 14:07 Yeah. Well, I heard a lot of great information. One being that due diligence, these older properties, we, if you're getting into the business and you don't have a lot of real estate background, you're not thinking a lot about back of the house stuff. You're thinking occupancy, you know, you're looking at the rent roll and your underwriting, you're looking at the Excel spreadsheet, right? And then when you're going in and doing your due diligence, you're walking into each unit. If you're investing in office, you're walking in common areas, the garage, you know, you're just, you might be able to look in tenant spaces, but going back to the house, right. And running that camera into those cast iron pipes, checking the chillers, looking at the chiller logs, you know, the maintenance on everything, just to make sure you know, what you are buying. You have eyes wide open.
Speaker 3 14:50 So true. You know, the outside structure, we find some shifting of the bricks. One should be talkie, totally cognizant and say, why are these bricks not matching sometime they do paint over it. It has happened. I've seen that, you know, subflooring all my Gus second floor. I mean, you know, sub throating is just clueless when there is this Florida has already given up and it's creaking those negative points, you know, or the flags never become green. I just tell them the small negative flag becomes bigger negative flag. You know, green might just stay same sites green, but the nerd ones become bigger and bigger. So I have always, always felt that every time when we kept on buying more and more and more and more and more to really get better at, you know, the financial due diligence, the physical, like you said, due diligence, the roofs, the chimneys, the outside exterior mirrors, the parking lot, the sewer lines, the waterline systems, all that electrical, all that system it's worth. That's what I would like to say. It's worth to spend that extra money with a professional company who can do a great due diligence because otherwise you're sharing are thousands and thousands of dollars once you have the keys.
Speaker 2 16:16 Yeah. And I think that's important because you're surrounding yourself with people that are experts in other fields, right. And especially if you're a syndicator you're or you're buying on your own, you're going to be experienced in what you do day to day. But it's important to spend that money to, you know, know what you're buying, but also you can use it as a renegotiation, right. Or a tool to renegotiate price. How have you used that? And it probably pays for itself after you
Speaker 3 16:40 Love to mention it. You know, I don't like to retrade, it's called retreading. The brokers hated the sellers hated. And you know, we haven't done lately, but in the past I've done where I've gotten, like, I'd say a hundred thousand, maybe two 50. I got, I know one property I've got 450,000 at the closing because the situation they shared with me was not really up to date information. Right? As we started going to the, these units, we found a lot more trouble with the windows and this sub floating, I just mentioned. And then of course the outside exceed years, they had painted it. So I'm just giving all these instances from my own self. You know, it's not any theory it's practical, you know, I've learned. So that's where I start. What I do is I'd love to give a nugget, is that I start my process of due diligence right away.
Speaker 3 17:40 I hired a very good company within the area. I've never walked a unit by the way, sorry, 29 things I've done. Maybe I'm balked in property. But most of the time, I just believe in getting the professionals, the best attorneys, real estate attorneys, the best syndication attorneys, the best loan brokers to work with me. I've closed on 29 DS from LOI Lectra intent to find closing. So in the last 12 years I have perfect record. I don't want to mess it up. But the key thing is that you have all these team members massaging and working with you, then it's much, much better way to take down the property. The big thing I would like to say is that as you do the due diligence, you just start taking pictures, even the due diligence team and you and your team members, everything that's off, Mark, you should get a picture of that and put it in the Dropbox front of the property, back of the property though, the sewer systems, the air conditioners, the quality of the rustiness, the broken pavement, everything, putting it in the Dropbox.
Speaker 3 18:53 Keep on putting, keep on, putting, keep on putting. And then you start getting some even bids to fix some major things. And within seven to 10 days, if you think from the due diligence, right, seven to 10 days, figuring out a way, if this is what you want to buy or not buy within seven days, you should decide on that walk away or go further. And then you start preparing it appeared letter, it's called repair letter on the 10th day, on the 10th day. Even though you have 30 days for the due diligence, you never want to wait until the 29th day to get this letter to the seller. And then seller says, you walk away. You know, I don't want to give you the trade or whatever, right? I mean, we don't like to do too much retraining, but when the product is not good, especially in CC plus reminders, you do find lots and lots of challenges. So it's good to really make that list and get it going and get some bids also so that you could proof give them through faith. We have all these 350 pictures of what the property needs. And we are just asking you for this, this, this, this, this, this line item, many times the sellers know that.
Speaker 2 20:10 Yeah. Well, and the other thing that you were talking about was investment. Well, in my mind, investment transparency and communication, because things are going to go, maybe not perfect. I mean, at the end of the day, we want things to go smoothly. And a lot of times it does, but when it doesn't always tell my team at work, we're commercial estate, managing properties. And you know, you want points on the board with your tenants because eventually you start going negative. But if you're still on that positive scoreboard, you're still okay. So when you don't have that relationship, you don't have the, the communication with either your investors or your, or your tenants or residents. That's when things start going that so
Speaker 3 20:48 Love to hear, you know, how do you stay? I mean, you, you said you do do do quarterly investor meetings. Yes. What's all your communication process. As soon as I purchase that property, I've been doing it for 12 years. Now. We are month after the closing. I haven't noticed the meeting. First month, I go with the closing statement. I give them the full disclosure, how everything went, where all these fees went and all that stuff. Right. And we closed it. They see all my snippets. I never, ever, ever liked to show them XN worksheets. Anybody can prepare Excel worksheets. I showed them real snippets from the closing statement. And it's like, take me four slides, but I want to share them everything. Who is the staff? How did we keep the staff that we purchased? You know, they were really good. These are their pictures.
Speaker 3 21:40 So I bring the properties to my investors. That's what I do to very personalized presentations. The templates that we designed, I design actually I've been designing them. I like it this way. There are lots of pictures of the asset that they can see every quarter on the quarter. But first three months I do three, uh, monthly, uh, investor meetings. First one is to go over the closing statement, second one, do it again. One month later to show them what we have done within a month. What was our business plan? How we have changed the curb appeal, how we have done the trimming of the landscape and this and that. If we have already bought curing machines and the, you know, cafes and all that. And then we have, uh, you know, media centers either bought the laptops and all those things. And all in ones, we have been doing dog parks.
Speaker 3 22:37 If you have reading those, any kind of thing, if you have done like the parking lot, resurfacing the striping and all that, those pictures are very meaningful to the investors who brochures for that marketing the website. That's my second meeting turn meeting. I do kind of take them into the software side, what software we are using. What's the purpose behind it, all the reports. This is where the portal is investor portal and all that. So I give them complete training on that and we record everything. Every single thing is recorded. All these meetings and those investors who are able to come the ask me, live questions in the zoom. And then the WebEx zoom, we have done all three. You know, now we do zoom and we archive those meetings. So we send that recording back to all the investors of that particular asset. So I've done it like that for 12 years.
Speaker 3 23:37 And then we do quarterly after that. So first three months, three meetings then quarterly after that, and then be deposit now checks. We never pay monthly. It's just too much hassle. A lot of my investors are very rich people. Doctors, attorneys, directors, it, people, all of them. They don't need that $500 check every month or $600. So we take quarterly and they're being actively going to the mailbox and picking them up four times a year. We have done it for last 10 years. Then last year we went into IMS system. When napped for you, we are, we are able to so important in every presentation I do. I have two, three slides to show my investors. We are totally transparent. They can ask for invoices, for bids, for bank statements, for PNLs. Everybody gives PNLs for rent cross. Everybody gives those. Capbacks any kind of thing they want no hold spot.
Speaker 3 24:44 And my VP of finance has been with me for 12 years and she's invested money. Her husband has invested money, double, triple money like that. Then our accounts payable, senior accounts payable manager. She's been with me seven years. So we have a whole department and I bring it to my investors. Should we get audits done on our books? And it's going to cost 12,000 or 10,000, whatever bids we got. We don't need to. I mean, you telling us everything and everything good, bad, ugly. I mean, you know, there's nothing Kidder. He asks for it and you give it to us. Why
Speaker 2 25:24 Well, and they sleep easy at night and you obviously have that relationship with them. And what's great. And what I tell investors for CREI partners, as you, it's tangible, it's a tangible asset that you are buying into on the equity side. You're part of the ownership. And you can go to the property. You can ask for this transparency, you know, a lot of times they're not wanting to get in the details, but at least knowing that they can is a huge, huge benefit and real estate investing versus other investments where you're waiting for, you know, a quarterly report or an annual report.
Speaker 3 25:58 Right. Right. I never give them in my PowerPoint presentation. An Excel worksheet never would have shown it for 12 years. Always. It's authenticated from the snippet, from the software that we use. And it shows the date. I took that report and what's the program I'm using. So every time they see dollar and cents, we'd never have kept two weeks. There is no commingling of any accounts. So when we buy a property BMI, a ticky count, we have escrow checking, a savings account, which is for our deposits and any of the escrows for tax or insurance. And of course, then we a cap ex account. So, and then we have investors account. So every single property I have like probably 120 accounts, right? Cause then we have managed a little C's and all the other accounts. So that's what we have a whole structure where there's no commingling of any money and everything is face value in pennies.
Speaker 3 27:05 And I even show that this is very interesting. I want to share with you through your audience when I show the cap X report and the cap is to board has like 17 pages long. I showed them snippet of one of 17 and show them the whole thing. Then I show one in the middle. Then I show the last one so that they could see and then be also upload it into our portal so that when investors can see all the 17 pages, every dime is a contract for it and everything. You know, we are really proud of that because we don't want them to ever fee that'd be were dishonest or anything or not integrity. And really having that fiduciary responsibility of taking care of other people's money's the best. And that they have told their friends and their family. I have my, my investors, who's brothers, sisters, daughters, sons. I mean, everybody's coming in, you know, so it's a happy family, happy family, I call it.
Speaker 2 28:08 Yeah. And just a side note, money, the initials of your daughters, right?
Speaker 3 28:13 Yeah. He have two kids, Neil and Monica went to Berkeley. He's an electrical engineering and computer science, scientists, and Monica went to UCLA. So it's Monica and Neil kind of put together is more Neal. That's our brand. Yeah. Like you see, you want to leave behind investment, money management, money living only in hospitality, one new grad, the now distill branding we'll need cloud defense money. Yeah.
Speaker 2 28:46 So when I transitioned to going back to your book, and you mentioned the plates earlier, so in your book, you discuss the five plates that a syndicator must keep spinning in the air, which I think is a great analogy. So those plates and I wrote them down here. So one was building suburb teams. The other is building investor lists and relationships. You got another underwriting and analyzing the deals. You've got loan qualification and property, takeover, and management. So a lot. And I really, for the listeners, if you are, if you can visualize spinning, you know, these five plates, I mean, that really is what a syndicator is doing. So my question to you, Benny, is, is there one plate more important than the other? And if not, what are your suggestions for active investors to not be overwhelmed by the process when starting out or growing their portfolio?
Speaker 3 29:38 Good question. Very good question, man. And thank you for asking that, you know, in the book, if anybody reads the book, I do explain that, you know, even though I did the loan qualification as great number four, because you do need to qualify for the loan, that's a huge part taking a principal or your own network because networks has to be more than the loan. Of course, when you get to 10 million plus, then it's not proportionally to percentage, but the first one is a very important place to get them, right? People on T you know, your partner, your people who are the lone broke. I mean, the sorry, the real estate attorney is on your team. SCC attorney, syndication attorneys on your team and loan broker is in your team. And then I covered the broker from real estate in my third place, because you got to get the whole system going second plate.
Speaker 3 30:33 I really make it a big deal out of it is the investor plate. How does syndicator, you know, if you don't need money, then you can jump over sleep. Number two, right? You know, you don't have to drop, but the biggest plate in the whole equation is the investor flip in mr. Plate. Because the more you cultivate great investors, the more your bandwidth will be. And once you are able to prove to them that you can deliver results, that it's going to be very, very tremendous scenario right there. Fifth fleet is the property management plate and anybody who's starting out, does it really need to worry about that until you get to that point, after you have bought the property, actually you will need that person before, even the company who's going to manage it. It's just your team building, right? Nobody will give you the loan unless you have a very solid property management company who has experience in that range of units.
Speaker 3 31:33 So essentially plate number one is small plate. Number five is small. Plead. Number four is also small. Once you do your financial statement and you read with some commercial loan people and you get a loan broker who can tell your story, that place all too smart. Now we are left with only two Greek plates, right? We have the plate number two, the Lester plate. I always have felt that I need to cultivate investors and make sure I keep the ones that I get and they can invest again and again and again, and fluid is also a big one. The third plate is the broker plate. That's the real estate broker. And then I always teach that, you know, in my Academy, you got to have three emerging markets, not just one. You got to have three different ones and you go many leave and trees.
Speaker 3 32:29 I call it trees and branches and leaves because different people, sellers in that one particular market is going to be working with not just one broker. They'll be working with several different outfits over there. So I really make a big deal out of that. You should have four to five brokerage houses in what particular market to relationships with. If you want to get off market deals and even, you know, do the campaigns and things like that. So number two is big. Lord. Number three is big. And that ever evolving, because if you're doing five or six, B as in boy exemption for the regulation D for syndication, you need pre existing relationship substantiated before the deal is really signed. And it gets on the paper because your database freezes, when you get a D from anywhere and you sign a contract, you cannot talk about that deal.
Speaker 3 33:32 After the people you meet for five or six, you could do it in five or six C advertisements. And for, to accredited investors only you can do it, but for the five or six B, which is 90 per cent of the syndication packets are done, but they exemption regulation D exemption fly was six weeks, our preexisting relationship. So I highly recommend everybody to really build their list, go to meetings, go to wealth clubs, you know, all the different places and your cleats and everybody do webinars, you know, educate people. That's how I started doing my business was educating within the restaurants here. It's the hardest thing, by the way, the C everybody listening to me, it's not that easy, but you've got to have the mindset $23 trillion trillion dollars in retirement funds in this country in USA. And out of that, about 11 or 12 million, a trillion trillion is in the self-directed not set directed.
Speaker 3 34:39 I would say, is that right? I'm mistaken. So I think 11 million I heard is the one that could be self directed, but only 5% is invested in syndication like ours. I mean, these numbers might be here and there, but the big thing is the mindset there's opportunities. For sure. Yeah. I mean, you know, I mean, just to give you an example, my car care center guy, I know him very well. I've taken my Mercedes there and all that, and he was working on it. And, you know, I talked that, you know, he's renting it and all that one time, a few years back, he says many. I bought the building. I said, Oh, really? What kind of loan did you get? Literally, I asked him, he says, no, I paid for me in cash. I said, what? She look at that, look at my thinking. I taught that he's just running a small operation, that he may not have money. The guy has so much money, you know, and assume never rationalize anybody. The people who don't truly show you that they have money, have the money I'm telling you,
Speaker 2 35:47 Man, this is a, a lot of good tidbits for all the investors. So I'd love to transition now to passive investors. So we talked a lot about the active, so let's talk a little bit about the passive. So what are some, some things that passive investors need to hear more of to ensure they're making the right decisions with their investment.
Speaker 3 36:05 I'm so glad you're asking me that question to see passive investing is going to get bigger and bigger and bigger and asset passive investor in fiber to do it. I will look at the principles first, who are the cooks in the kitchen. I call it if there are too many cooks in the kitchen, it's going to burn and this appease done going to be there. Everybody's still know if they go to splits and things like that during the five years, it's the worst thing can happen. Look for how many general partners are in your deal, who are the principals? There should be no more than three to four or five, four people at all in any kind of syndication, because there's no reason for that money. Other parties, austere track record, big time, you know, what have they done? You know, a lot of people say I've got five thousand seven thousand units, but ask them how many you are principal in how many limited partners, how many is general partners?
Speaker 3 37:04 So those are the three questions you want to ask them. And how what's your experience and how many properties have you given the full cycle and how, how had the returns, right? I mean, all those things are very, very important also to Julie, check them out about their credibility, about director, you know, any kind of, you know, any things happening, things like that. The other part is how is their criteria, Dubai? What they're looking for, are they into that particular segment? How many properties they have bought in that particular please, where they're asking you to invest things like that. But the biggest thing is how conservative are there underwriting things, because in underwriting, you could flip a switch just like this, and you can make spectacular returns come alive, like just changing phew, 0.25 in the cap rate, you know, just the Capri exit or enter whatever.
Speaker 3 38:07 And you can add a little bit more into the rent and that's going to blow up the numbers like crazy. So you gotta be really, really thinking through, okay, how conservative it is. Would they really be able to give the kind of percentages they're telling me as preferred returns? I see some people giving 10% returns, put the properties, giving only 5.5% cash in cash. How can you give it? So some of the syndicators are taking the money from the bar, from the investors and then giving it back to the misters. Wow. I know my syndication attorney said, it's a fraud. It's a Ponzi scheme. You know, so it's very tough. I mean, you know, please look into all of these things. And then a lot of other factors, you know, of course what's the due diligence process who is managing the assets. That's a huge one because once the deal is closed, some of the principles are going to go away.
Speaker 3 39:08 You know, only one or two are going to be left behind to watch the asset and work with the property management companies. That's why we are self managing because we I'm the CEO of all the businesses. So buck stops stops with me. You know, I'm the principal, I'm the loan getter. I'm on the, I, my, you know, millions of dollars of signatures, you know, to get all these loads of 40, $50 million loans, all that stuff. Right? So those are a few things come to my mind, but you know, hardened money is very hard and money. And that's why my wife and I did small company mom and pop company, you know, 350 million, maybe half a billion soon, and then to a billion. But the key thing is my wife is involved. So what's the succession plan. Oh my gosh, I forgot succession plan. You know what happens if I died tomorrow?
Speaker 3 40:03 Right? My attorneys fight for attorneys, my whole accounting department, everybody, my daughter is fully involved. She's making official VP of operations. Then my wife is fully involved with the, you know, investor relations VP. And then I have other VPs of other businesses and all that. So I feel really proud that the systems I've built and that's how one should build. And I'm sure there are a lot of great syndicators out there who have built it, but it tends to have a good succession plan. What happens, you know, if some lawsuit comes or this and that and how the insurances, the key man insurance and all that,
Speaker 2 40:46 Oh, it's a lot of great information I want to, with the time that we have available, I have two more questions. One I'm really interested to hear about the move to the senior assisted living.
Speaker 3 40:57 Oh yeah.
Speaker 2 40:58 And especially with everything going on right now with COVID-19 where are you with that? And so what motivated you to get into that space now? And can you talk to me more about what you are seeing that getting you into that
Speaker 3 41:11 I love to love to win. Actually, I've been contemplating for two years, by the way, the silver tsunami starting to happen in USA about two years back or so when I read the first articles, I said, Oh my gosh, demographic shifts are happening. People are moving towards more into the warmer States, you know, and everything into Texas, into Florida, Virginia people from up there at Arizona. And then now 10,000 baby boomers are turning 65 every day, every midnight, they turn 65. These effect of demand for senior living, not independent living. We are not in that at all. We are not into acute care like nursing homes, not at all rehab centers, nothing at all, where there are doctors, nurses, there is a 24 hour, you know, a watch and everything when we are not into acute care either. That's the other places where it has happened.
Speaker 3 42:12 Some deaths have happened in nursing homes because the residents, I mean, residents, you could say, or patients are coming back and forth from the hospitals. And they brought the widest seas and things like that in our rehab 22. Oh, let me share now. So I was sending messages out in the universe that really wants to be in senior living. I didn't know how to be truthful. I have always believed in energy. And we came across a partner of mine now who has done 23 of assisted senior living luxury, kind of already. He's the perfect person, developing ordinance, changing, getting the whole project off the ground and he's done it 23 times. So that's what I partnered with. Bill senior, living fitness team, Ron and myself. We have about 600 million assets together now. And then we are doing ground up construction, not take the ones we turn existing and manipulate or runaway them.
Speaker 3 43:18 But we are breeding from scratch buying the one studio only. No, that was the other problem with covert was the elevators and the waging, the elevators and people getting stymied and all that. There will be some new revolutions coming, but we never have believed in elevators at all. At our senior living, we built three separate compounds, and then it's all senior living about 88 to 90 units. We don't go for 200, 300, 500 in a assisted living. Like there are some verticals we just go flat. And then we, by them in the places where we do extensive research, because we buy the land, we go to all the ordinance changes and permits and all architectural drawings on our dime, everything on our dime. And then we only raise money when we put shovel into the ground. So that has been our success recipe. We put shovel in the ground in 12 to 14 months, the whole thing.
Speaker 3 44:23 And then we are able to manage it for nine or 10 months, and then we sell it. So our main recipe is to build it quickly, cheaply nice with the movie theater in assisted living. We have spas. We have, uh, you know, uh, the, the, uh, libraries. We have all these dining halls and be your rooms. It's like a five star hotel. That's what it is. And this is much tight family at school, a plus. And the best thing is we start marketing already when it's 75% complete, we know that maybe opening on certain day and then darn it. That's it. We have like 50%, 60% Quincy, the daily clinic. So that's how it a sippy and you're doing it over and over and over again. My father is from Michigan. I shouldn't say he built 22 of them saturated in every small town in Michigan. Now we are in Florida, in Virginia, in Texas, in Arizona, Washington state and Oregon state. So that's where we are coming. And maybe building six to 10 every year, 60% every year,
Speaker 2 45:37 The big takeaways from me. And I want to do another podcast at some point talking about senior,
Speaker 3 45:42 Oh, I'm not yours. It's such great many big. And you know, I will even show some of the demographic shifts in the charts and all, because that's what we have been studying for the last two years. And it's just the right time, because shortage is amazing. I mean, we were, we started six locations in Michigan. Yet this year they were closed down in covert. Then we got special letters from the mayors of the city. They said, you don't want to stop. You want to keep on building because we need these facilities. So it's really exciting for us to see that you have that. And also some of the cities are cutting down the time period, how it takes for all these approvals from six to nine, eight to nine months to three months, they're saying we want your quality assisted living facility and memory care, which we will.
Speaker 3 46:38 And we are getting great loans. 4.3, 2% construction law. Jamie had fixed, you know, with no prepayment penalties and all that 75% loan to construction loans, really fortunate. And then my main business is definitely multifamily. This is just a sidetrack in developing multifamily, assisted senior living it's multifamily at its core. And then hospitality who tell us, we just bought Hilton garden. Then we are buying mania. So that's my other part of the company, which will go with now. Oh my gosh. I mean, hotels are going to be selling so cheap, so we are ready to buy them. Yeah.
Speaker 2 47:21 One thing that, you're a great example of that is partnering with people who know that business really well. I mean, you, you could have gone in and said, you know, I've been successful, I've got the money. I'm just going to go in and do it myself. You didn't do that. You chose to partner with somebody who has the experience and who's able to ramp up and scale quickly.
Speaker 3 47:39 I totally agree what you said when I think once you'd have in mind of abundance, first of all, always believe in abundance and positivity too. That's the other thing, right? Like new book is coming out. Positivity brings profitability. And the key thing is, and my podcast also same way. I believe that there is so much we can do and accomplish, and let's not limit ourselves to one thing. So I've been to six different companies. I just started a digital branding company. Also, I found the best of the best partners in India. And now we are selling click funnels and in a box and lead back the websites, the advertising, the graphics, everything at so cheap price, you know, for the investors in my Academy who are learning from me and all that, and anybody who approaches us. So we have that part of the business shooting up eCommerce stores. I'm really big on that. So that's my new business. I'll be starting very soon in e-commerce and selling products online. That's my other part,
Speaker 2 48:47 How you fit it all in. I'm not sure, but Hey, I got a question for you and I want to end this the same question. I'll ask every guest of mine and really want to ask, you know, what's your proudest moment investing in real estate?
Speaker 3 49:00 You know, the proudest moment is when I give these big, big checks to my investors, that's the proudest moment ever, ever. I look forward to giving them 40% IRR 42%, 3% per year returns. I promise them only 10 or 15, but I double triple them. You know, that's my proudest moments. And I really believe when my investors can give me some comments. I was humbled. I had not asked my investors for last six years, how they felt about me. So I just sent a small email. I got 42 replies right away telling me we need, we appreciate working with you for this, this
Speaker 2 49:45 I love it. Yeah. And after six years, it's good to hear, you know, get those emails. So are there any other items you would like to share with on the show or about your company?
Speaker 3 49:55 You know, Dean, the big thing is please jump into real estate. First of all, if you're not into it, you're on the sidelines. Jump into commercial. If you even not doing less than four units, which is residential by duplex or triplex, fourplex never buy a single Plex because the economies of scales also get into multifamily. I didn't get into shopping centers. It's going to be bad news coming up, office space. It's going to be very bad news coming up now with people just staying and working from home and things like that. The hospitality of course, you know what? Those have been great, great moneymakers. But now everything is little bit, but I would say get into syndication. I mean, that's my biggest advice. Money's flowing all around you. I'm telling you it's there, but you gotta believe in it and you go for it. Get a great mentor.
Speaker 3 50:54 There are several very good gurus and mentors in USA. I'm one of them who is doing it, killing it and doing really well. So please join. And you know, don't yeah, yeah. In a joint, somebody who can take you where you want to go, I guess, and whose personalities, what you are really about and where and how can people find you Vinny. Oh, okay. I'm all over the internet. My team from Poona they do everything. I don't do a thing. I'm telling you. I'm the kind of guy I play bridge and do other things. And all morning in the morning I eat a busiest people have more time. I believe so. I have so much free time. My wife won't say that, but you know, the key thing is just compartmentalizing it, utilize it. You could Google me. Anybody can Google me. Vinny Chopra, VI and E Y C H O H Oprah or my website is miniature product.
Speaker 3 51:54 That's V I N N E Y C H O. And we are building four more websites in senior living, investing and everything. And then you could email me also. Anybody can email me at Vinny activity. Wonderful. Thank you so much for being on our shower podcast and look forward to staying in touch. If I can do anything for you, let me know of any. Thank you man. And God bless you. And so glad you're giving back to the community with this podcast and yeah, he's, you know, I'm, I'm at your disposal. If you want support senior living or things like that, or even go deeper into certain other things, I'm here for you. You bet. Sounds good. We'll stay safe and well, I'll talk to you soon. Thank you.
Speaker 0 52:38 That's all. For this episode, we hope you subscribe, share and leave a review of the show for more information about passively investing in multifamily apartments, check out Wayne's free ebook by going to <inaudible> dot com or slash ebook. Also follow us on Facebook by searching <inaudible> partners. This was the untold stories of real estate investing.
