Check out Rajesh’s website at www.smartcapitalmgmt.com
and his email is email@example.com
Apartment Investing & Multifamily Syndication (AIMS) Facebook group: https://www.facebook.com/groups/Apartment.Investing
Raj talks about the expense ratio here. The operating expense ratio is determined by taking total expenses and dividing by total rental income.
The physical occupancy rate is the proportion of units that are occupied by tenants. An economic occupancy rate is the proportion of the gross potential rent that is collected — the money that is actually collected by you or your manager.
T12 or Trailing 12 or Trailing 12 months is the data from the past 12 consecutive months used for reporting financial figures.
An accredited investor, in the context of a natural person, includes anyone who:
– Earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR
– Has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).
Rajesh’s meetup – Apartment Investing & Multifamily Syndication
You can access Enodo here: https://www.enodoinc.com
Raj’s LinkedIn article: https://www.linkedin.com/pulse/how-my-journey-up-real-estate-learning-curve-raj-tekchandani/
The ABCs of Real Estate Investing: The Secrets of Finding Hidden Profits Most Investors Miss: https://amzn.to/32fNVff
What Every Real Estate Investor Needs to Know About Cash Flow… And 36 Other Key Financial Measures – Frank Gallinelli: https://amzn.to/33ihOvl
Best Ever Apartment Syndication Book: https://amzn.to/2IF0rNr
Raj’s LinkedIn Profile: https://www.linkedin.com/in/rajtek/
IRR: Internal rate of return (IRR) is the interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equals zero. Internal rate of return is used to evaluate the attractiveness of a project or investment
Raj’s website is www.SmartCapitalMGMT.com
Rajesh Tekchandani: [00:00:00] But fortunately for us, you know, the like I said, the area has been gentrifying. The rents are going up. Even though I had to deal with a lot of evictions and low occupancy rates and all that stuff going through, you know, multiple property managers because like I said, I’m not the person who’s going to manage any property that I want.
Rajesh Tekchandani: [00:00:20] I always want to have a property manager between me and the property.
[00:00:23] Welcome to the show. You are listening to the real estate podcast in this lab. Decode the stories, secrets and skills of the most brilliant minds in real estate investing, then turn that wisdom into practical advice and knowledge that we can use to boost our income. Now let’s turn it over to our host.
Vee: [00:00:42] Hey there. Thank you for tuning into episode number two of the real estate lab podcast. Our featured guest today is a seasoned technology entrepreneur and marketing executive who is now a full time real estate investor. Prior to starting his company, Smart Capital, he spent over three decades with tech startups in the field of business, intelligence and data analytics. He started investing in real estate in 2012 with a purchase of a single condo in Orlando, Florida. In 2018, he left his job after five years to pursue his interest in real estate investing full time. His meet-up and Facebook groups, apartment investing and multi-family syndication is one of the fastest growing meetups in the Boston area that I know of. His portfolio today includes nine condos in Orlando, Florida, 15 units multi-family in the Greater Boston area, 151 units in Dalton, Georgia, 152 units in Thomasville, Georgia. 225 units in Amarillo, Texas, and 80 units in Kansas City, Missouri. Ladies and gentlemen, our featured guest today, Mr. Rajesh Tekchandani. Him and I discuss many aspects in multifamily investing in syndication, raising private money, particularly things that he did wrong on the first multi-family deals that he did on his own.
Rajesh Tekchandani: [00:02:04] I think you will get a lot of value out of this podcast today.
[00:02:10] Hey, Raj, welcome to the Real Estate Lab podcast. Hey, thank you Vee for having me here, man. Thank you. Thank you, man. You are doing so much for everyone on the multifamily community. So I really appreciate for you to take the time out and do this interview with me. It’s my pleasure. Like I said, it’s my pleasure. So, Raj, walk me back. Say we are junior in in high school. So who is Rajesh?
[00:02:38] Yeah. So it was Rajesh and not Raj then because Raj came up and I came to the US anyway. So back in junior in high school, I’m very focused on doing engineering and computers is what I was had no knowledge about. You know, business or marketing or selling. But I really want to be an engineer. That was that. That’s what I was.
Vee: [00:03:01] So you focus in doing engineering work and then you came to the US to study and pursue that career?
[00:03:09] No, actually, I got my engineering undergrad degree in India from a pretty decent university. Now, I read in one of the best is to call the Indian Institute of Technology at Ruki. So that’s when I did my undergrad in computer science from and maybe a year later, after I did that, after graduation, I came to the US.
Vee: [00:03:27] And then when you came to the U was you were always in tech and startup. Correct?
Rajesh Tekchandani: [00:03:33] Yes. I have always been on my own ever since my professional career. I’ve been in sort of early stage startups. And I did some, you know, large corporations before. But, you know, most of my professional career has been in startups. Tech startups. Yes.
Vee: [00:03:47] So fast forward to your your last job. As I understand, it was a marketing exact position and a startup.
Rajesh Tekchandani: [00:03:53] Correct. Correct. So, again, you know, it wasn’t it was not really early stage, but, you know, thought that was doing well.
Rajesh Tekchandani: [00:04:00] And I interviewed there and I liked what they were doing. They were trying to use data analytics to creating a platform to basically analyze data and make businesses decisions based on data.
Rajesh Tekchandani: [00:04:12] So they had that big data analytics graph tool that they were building. So it exciting.
Rajesh Tekchandani: [00:04:19] And my role was in the marketing, basically evangelizing, you know, what we were doing and this new product.
Vee: [00:04:25] So the hard work that you had put you at this point where you’re marketing exact, why did you or how did you decide to go into real estate?
Rajesh Tekchandani: [00:04:35] I had been investing in real estate on side that somewhere in 2012 I got at least interested in looking at, you know, passive income or just, you know, putting aside some money in real estate. And I had bought one condo in Orlando because a friend of mine was buying there. I said, you know, let me go down with two and take a look. And it so happened that the prices were way down in a nice community. And I bought. My first condo for thirty five thousand dollars.
Vee: [00:05:02] Right, so twenty twelve, twenty twelve. Your friends took you down to Orlando, Florida and show you around for his properties and you automatically bought one property for thirty five thousand dollars. Now that’s correct. Yeah. There must be other friends also. Also, you are investing in different vehicle of, you know, stocks of precious metal. Why did you ultimately picked a real estate as opposed to the other investment vehicle?
Rajesh Tekchandani: [00:05:30] Absolutely. I was in stocks. I was you know, that was that was our only investments in stocks. And of course, not metals, not nothing to do with futures, but mostly stocks and mutual funds. And of course, with, you know, startups, I hired a lot of the options that are our stock options. Right. I had know made a decent amount of paper networth.
Rajesh Tekchandani: [00:05:50] But then you know what happened, right? Everything came down and we all lost whatever we had gained in those in those markets. And I would like my. This is not fun. And I had no control on what one I could have been, you know, brilliant dancing ahead and sold in time. But I didn’t add that crystal ball. So that kind of, you know, took me out of the stock market and looking at some other markets. And we still do some stock know through my wife’s work. And and so we are still invested in it. But my me personally shifted my focus on real estate investing. Again, like I said, this is still early, early, early getting into real estate and understanding the market how it is. And fortunately, I had I got into after the 2008 debacle. So I got to know when the prices were down and signs of showing no improvement and coming back up.
Vee: [00:06:36] Right. And then you ultimately bought more from from this market?
Rajesh Tekchandani: [00:06:41] Yeah so same Orlando, same a apartment community. I bought a second one and third one and ultimately ended up buying nine condos from one bedroom. Two, three bedroom difference is just not big them all mine condos over the next four or five years. Something like that. Yeah.
Vee: [00:06:57] So what were the things that you learned along the way from buying your first unit to your ninth one?
Rajesh Tekchandani: [00:07:04] The one thing that I learned was that it’s it’s it’s not really easy to, you know, buy and own rental property, especially when it’s remote. It requires a lot of work. It requires you to be on top of it requires interacting with or your tenants and, you know, good staying ahead of the game. Fortunately for me, we had a very good property manager there and she was taking care of everything. And till she passed away, unfortunately. And then it hit me, oh, my God, what do we do now? But again, God bless her family. Her daughter also had picked up, you know, the ropes off a property management from her mom. And she is now been managing our nine condos very nicely there. So thank God for that, but yeah. It’s not easy to be a landlord, especially when it’s remote. And you absolutely have to have a web based property manager to do this thing, business. Right cuz otherwise.
Vee: [00:08:02] You know, it’s not so much passive anymore. Become more of an active role for you. Exactly. So there’s nine condos out a close to Disney or what area?
Rajesh Tekchandani: [00:08:13] They are close to Disney. And that’s wonderful because we have, I don’t know, probably a one month of vancacy in all these years and all these condos, because these people this is a very high demand in that community. And it’s uh close to Disney. It’s, you know, not too far from the airport. And it’s it’s it’s the, you know, working class that lives there. It’s not. Not luxury condos. These are not C-Class condos. What I would say there’s these are B-class condos and for working class. And there’s a lot of demand there. So fortunately for us, you know, the you know, had our nation with vacancy and the rent.
Vee: [00:08:52] So right now, your strategy with these condos are just having the daughter of this property manager run points and rent them out long term. Or are you looking at AirBnB also?
Rajesh Tekchandani: [00:09:03] No, no. These are all long term, long term rentals. So, you know, and that’s my it’s my buy and hold strategy. It’s a good cash flow that pays for other stuff that I’ve tried to do or, you know, working on real estate.
Vee: [00:09:18] So then what come what come after the nine units condo in Orlando?
Rajesh Tekchandani: [00:09:23] Like I said, you know, so those were chugging along well. But, you know, it’s like this thing that I need to, you know, have more control over it closer to the home, as everybody talked about.
Rajesh Tekchandani: [00:09:32] We should buy close to where you live. And I said, okay, let me try that. So I started looking around. This is 2016 now. I found a 12 units.
Rajesh Tekchandani: [00:09:40] Actually, it’s a 12 plus 3, 15 unit property that came very close to where I live in the Boston area.
Rajesh Tekchandani: [00:09:46] And it’s in the neighboring town, which is it’s an upcoming town. It’s not the most affluent towns.
Rajesh Tekchandani: [00:09:52] It’s it’s it’s it’s been gentrified. So I knew about the area and I like to bike down the road, but I drove. Drove it there, too. Just look at it and felt good. I mean, it was an old, old building and I talked to the property manager there and it would seem like it was all gonna work out. I took the plunge and bought it.
Rajesh Tekchandani: [00:10:13] Also wanted to get into the whole multi-family thing off, you know, everything under being one roof and n 10 separate bills for electric or all the standard differences between single family and multi-family at the benefits of multi-family.
Vee: [00:10:26] Right. Right. I also did purchase a small eight units multi plex in Jacksonville. Enjoy. It is a small town. I I made a lot of mistakes buying that first one that you run into some of that same issue.
Rajesh Tekchandani: [00:10:43] Of Course. So, you know, there is so much more that I did not know about, you know, buying a multi-family. Just take the expense ratios up and the expense ratio in this multi-family C-Class was about 30 something percent. I mean, that is a red flag right there. Yeah. And you know, the occupancy was hundred percent. I’d like all that great. But then I discovered that it’s something called the physical occupancy and something called the economic occupancy rate. You can have everybody living there, but not everybody will be paying rents on time or being, you know, way behind in their schedule. So the economic and occupancy is, you know, something that I learned then I learned about and all the expenses that were not on the T12, which is the financial statements that I got when I bought it, just because the owner was self-managing.
Rajesh Tekchandani: [00:11:33] None of those expenses through his son snowplowing and, you know, some basic other expenses were not on that thing. And when you live in the Boston area, you know, snow can be a huge expense.
[00:11:43] Then come wintertime. Was it was it in all bills, pay property? So you were well worth it. Yeah, it’s an obvious paid.
Rajesh Tekchandani: [00:11:52] I think I take that back. No. There was he is being paid by us. So that is big thing. The heat is being paid by us and everything else is being paid by us as well, except for except for their electricity and they are cooking gas.
Vee: [00:12:11] So all the big ticket items. You had to pick it up basically. Yeah. Yeah. Oh, man. Yeah, definitely. That 30 percent was way too good to be true.
Rajesh Tekchandani: [00:12:21] Yeah, exactly. So I mean, those things are those are the things that, you know, like I said, and knowing what I know now, I don’t know if I would know about that. But fortunately for us, you know, the like I said, the area has been gentrifying. The rents are going up, even though I had to deal with a lot of evictions and low occupancy rates and all that stuff going through, you know, multiple property managers, because like I said, I’m not the person who’s going to manage any property that I want.
Rajesh Tekchandani: [00:12:49] I always want to have a property manager between me and the property tenants.
Rajesh Tekchandani: [00:12:53] So that’s my model. People have their own models. So I have to rely on a property manager and it takes time to find the right property manager.
Vee: [00:13:00] What do you look for in a property manager?
Rajesh Tekchandani: [00:13:03] I think the number one thing that you look for is are they something that I’ve done their local presence? Right. I mean, how how accessible they are to me and to the property. And how is their reputation in the marketplace. So, you know, those things I learned over the time.
Vee: [00:13:21] How do you see your property manager on on what model?
Rajesh Tekchandani: [00:13:26] So we pay them on the rents. Collected a certain percentage rate.
Vee: [00:13:30] So you pay seven, eight, nine, 10 percent every month of whatever rent they collect, collect it. Right.
[00:13:37] Bbb on a quarterly basis. Yeah, but that’s pretty much it.
[00:13:41] Okay. And then do they charge you for your rent or placement? Yes, they do. The new ones do. Do you like that model. Or do you like the old model more with your model. Do what you will. You said the new one do.
[00:13:55] So I’m just you know, like I said, I really want to be hands off. And if they can do a good job doing background checks and everything else, I’m willing to pay a portion off in our profits. Like I said, at the end of the day, it’s a numbers game for me. I mean, if I’m if I’m doing well and I’m making a decent cash flow, I don’t mind sharing the profits. That is my model.
Vee: [00:14:19] I assume with all of these properties, you have enough of a passive income to replace your W-2 income.
Rajesh Tekchandani: [00:14:28] Oh, well, I wouldn’t say that. I mean, it was that was the intention that. So by the way, twenty eighteen I made that decision that I’m going to leave my W-2 to replace my W-2 income now that I had some confidence on passive income. So I set out to buy it in a couple of more properties like this I had between those nine and fifteen and if I bought another fifteen twenty that would have easily replaced my W-2 income and totally passively. Right. Right.
Rajesh Tekchandani: [00:14:56] But I couldn’t find much in the area off, you know, that 15, 20 range. And also, you know, now I’m you know, now that I’m more learned, I should say are educated in terms of, you know, mistakes and all those and how to evaluate properties. I realize that, you know, in Massachusetts is not where I want to focus my energies on. And small units is not what I want to focus my energies on. And that led me to the whole world of syndication. Thankfully, I had a friend who was engaged in this a few years ago and had offered me to invest passively in his deal, which I refused because I said I have no ideas of what you’re doing. And this was in Georgia. I said, you know, he was at that point, I think was two hundred and something in it. I said, are you crazy? That’s a lot of. But he had sold. He told me that, you know, don’t worry. It’s it’s it’s it’s a method to this madness. And you know, you learn. And I say, OK, when I learned and I’ll come back to you. And lo and behold, here I am.
Rajesh Tekchandani: [00:15:53] But, you know, multiples indications up or five hundred dollars an investment.
[00:16:00] How many syndication deals that you participate on the GP side and then how many on the LP, side, so I did one on the LP side.
Rajesh Tekchandani: [00:16:09] And I’m always looking for LP deals and I’m an accredited investors, always looking for good deals. But I like I said, I did one LP and I said, okay, I have enough time and energy and bandwidth and, you know, ways I can help a general partnership. So let me be more involve. So I’ve done three on the general partnership side where I have, you know, done the due diligence work, done some analysis work, gone down to the properties to do surveys with the team. And now I manage investor relationships and also some capital raising for them.
Vee: [00:16:40] So, again, interesting. So walk us through your first capital raise that you did.
Rajesh Tekchandani: [00:16:46] So the first capital raise was through the same friend of mine that I had met. Three, four years ago who had offered me a deal, right? He was out of the picture, but his partner was still there and they were doing a deal in Georgia. And clearly, like I said, I mean, capital raising is just not capital raising. It’s actually a capital raising partnership. So you are a partner in capital efforts. So I asked them if I can and come down to the property because they were doing due diligence at the time. And I said, you know, I was interested in investing in it. I want to come down and take a look what the processes. So we went down to Georgia. We met with the property management, the potential property management team on this project. We did the lease audits. And I learned all about lease audits, tenant profiles and how the models work got gotten really more than detail level.
Rajesh Tekchandani: [00:17:35] Right. That’s how I like it to be. And then, you know, build my add in and the numbers in my own models, now that I know a little bit of modelling financials and the numbers look good. And I talk to the board with my some friends and family members. I said, this is what I’m investing in this. And that looks great. And we would like to invest with you. And I said, well, let’s let’s sit down and talk about it. I want to make sure that you understand what this businesses because not everybody understands syndication. Right? Right. Taking real estate investing is buying something and, you know, owning onto it and wait for little appreciation. And they don’t understand this whole pool investments. Right. The syndication is a group investing together. And the structural affair. You know who’s a general partner?
Rajesh Tekchandani: [00:18:21] What are their roles and responsibilities? Was a limited partner and what does their roles and responsibilities. So I had to walk a lot of my friends through small meetings, lunches, dinners, breakfasts. And that’s how I educated my early investors.
Vee: [00:18:35] So your early investor and you also mentioned earlier that you are accredited. Can you explain what accredited is? And also were your an early investors accredited themselves.
Rajesh Tekchandani: [00:18:48] So, yeah. So two parts, right? The first part, what does an accredited investor. So by definition and I. Maybe little off in words but But in general, the definition says if you are a single then your income should be two hundred thousand or more. Or the last two years. If you are married and joint filing, then it should be three hundred thousand or more. Or the third option is that your net worth excluding your primary residence should be a million dollars. So if you satisfy those conditions, then you’re an accredited investor and taking part of your question is, were these all accredited investors for me? No, they were not. Because the way the deals syndications are that you have to kind of exemptions in it. One is 506 B, as in boy. And the other one is a 506 C, as in Charlie.
Rajesh Tekchandani: [00:19:38] In the 506B, you don’t have to have all accredited investors in the deal. You can have accredited and up to 35 sophisticated investors, but you have to have a pre-existing relationship with these investors, which means, you know, you met with them, you know them very well. You know their financial situation. They know about the deal and you’ve talked about it. So like I said, it’s a pre-existing relationship and this existing relationship should have been there before this deal was made available. So that was the deal that I worked on. First one was 506 B, and that’s how we got some accredited and some non-accredited investors in it.
Vee: [00:20:17] So then when you were jumping from your nine to your fifth year, 12 plus three, the biggest syndication. What were some of the hurdles that you had to jump through?
Rajesh Tekchandani: [00:20:29] So from nine to fifteen is all of my investments, right? I mean, so that’s me. I’m responsible for it. And any actions that I take or not take me, once you go out into the world of syndications, now you are obviously if you are if you are raising capital, you are raising capital with some other passive investors who, you know, you’re responsible for, basically for a lot of a lot more. You are responsible for making sure you pick the right partners. You’re responsible for making sure the investment is right and making sure if you have investors that are taking care of, you know, before you are, you’re taking on the risks and basically shielding your passive investors from those some of those risks that you are willing to take. Plus, there is a lot more education that needs to be done right. I mean, every deal is a little different deal and every deal. You have some nuances. You have to understand the deal completely first before you and you’re not presented to anybody. So, yeah, you better make sure that you are you are fully bought into the deal yourself before you you and talk to any you think of talking to any investors, getting an order and investors in the deal.
Vee: [00:21:42] So you mentioned briefly by education. What’s your personal opinion about mentorship or mastermind?
Rajesh Tekchandani: [00:21:51] I have I have really mixed feelings on that because, I mean, I am fortunate to be with a couple of groups that have worked well for me, but I’ve also heard some horror stories of, you know, people joining this some guru classes and paying a lot lot of dollars and still not, you know, feeling good about it. Yeah, I’m definitely you know, networking is a big thing. You you learning is a big thing. Knowledge is a big thing. So you can. And partnership is a big thing in this game. So you can’t work in a vacuum. So you have to be educated. You have to have the knowledge and you have to have the right partners, which is also some of these, you know, masterminds and coaching groups provide to you. So I definitely see the value there. Just have to do your due diligence in finding out which one you want to invest in.
Vee: [00:22:42] So not only that, you need to do due diligence on the deals. You need to also do due diligence on the coach.
Rajesh Tekchandani: [00:22:49] Yeah, I mean, that’s two different things, right? I mean, the deals are is a deal separate thing. But for your personal learning things, you have to be. Absolutely, you know. Because the right group that you’re working with, I mean, not me. The deals are in our in our case. And I know some in some groups that deals are part of your coaching things. But where I am, you know, the deals are separate. You can get feedback on the deals. But the coach doesn’t provide you deals. Correct.
Vee: [00:23:14] Correct. Yes. Yes. And that’s the main thing, because otherwise I’ve I feel like there’s a conflict of interest there because the coach wanna prove his or hers credibility to give you deals. And then it may or may not be a good deal. Now, that’s like your W-2 job and you are now pursuing the real estate in syndication full time. And your role is a capital raiser on the general partner side?
Rajesh Tekchandani: [00:23:41] That’s not completely true. My role is a general partner and I play all kinds of different hats. Capital raising is is for everybody in the team. I think. So, yeah. You can have defined capitalism, but that’s not how I like to work. I mean, I like to get involved. And like I said, due diligence, the marketing, the the efforts of, you know, analyzing the deals. And it’s it’s it’s a whole different things. But, you know. I do enjoy talking to investors and talking to people and raising capital for the deals.
Vee: [00:24:12] Can you talk about your work day now compared to your W-2?
Rajesh Tekchandani: [00:24:21] So Vee you know, you and I are talking at on a Saturday morning at 10:00 and I’ve been up since 6:00. Writing a blog article, just sharing my experience and journeys. And that’s how it’s typically is. There is times that you do whatever you want. So that sort of flexibility and total accountability on yourself. So that is, in my opinion, there is like really no working hours anymore because all the hours are working hours. And that is, you know, you pick choose to give free time except for when you have meetings with investors or other people that you have to meet. So it’s not it’s not flexible. But a lot of my time is, you know, analyzing deals, you know, talking to some brokers, talking to lot of prospect investors, you know, people in my. So I also run, you know, meet up in the Boston area. So I’m always looking for different topics. You know, and there’s a lot of follow ups from that meetups. I am also actively managing a couple of Facebook groups. There’s a lot of follow ups there. So, yeah, I mean, it’s it’s it’s it’s I don’t know where the day goes.
Vee: [00:25:22] Yeah, definitely. I feel like, you know, you have the financial freedom to do whatever you want. But also sometime you you’re working a little bit more than your W-2 job, although I don’t think that is working if you enjoy the work that you’re doing.
Rajesh Tekchandani: [00:25:39] Right. Exactly. So, I mean, if, you know, somebody said if you don’t do it’s not work if you’re enjoying it that much. Right.
[00:25:45] It’s really doing it right.
Vee: [00:25:47] So what’s your drive? What’s your passion in doing all this?
Rajesh Tekchandani: [00:25:52] I think it didn’t started off that way. I mean, my my starting point was to build enough and a passive income for myself and my family. But I think suddenly my driver shifted to educating others to do the same. So, yeah, I’m spending a lot of time in coaching, talking to people, sharing my experiences.
Rajesh Tekchandani: [00:26:12] You know, what is possible? You know, telling people about alternate investments from, you know, stocks and bonds. And in the markets that real estate is is a really legit vehicle to invest passively. You can do it actively if you want, but that’s going to be another job for you. So just opening the doors for other people. I mean, something that I’ve learned over the last year knows whatever 7 8 years 10 years.
[00:26:35] So now it’s become like a passion to, you know, get more people engaged in that and you’re getting more and more people engaged in through your meetup at Boston.
Rajesh Tekchandani: [00:26:43] Yeah. So the Boston meetup is growing, the Facebook groups are growing, the people at anymore conferences.
Rajesh Tekchandani: [00:26:49] So in general, my network is growing. And, you know, that’s that’s about it. Just keep working at it and we’ll keep doing good things. And, you know, this will all take care of itself.
Vee: [00:27:00] So talk about your meetup. What’s the name of your group? And who should attend your Boston meetup?
Rajesh Tekchandani: [00:27:07] So the name of the group is Apartment Investing and multifamily syndication. It’s AIMS aims for short, easy to remember. And I started this meetup because I I was going to a lot of meetups in Boston and I could not feel that I was fitting in in terms of the focus was not there. I mean, these meetups are large meetups and they talk about everything from, you know, flipping wholesaling and are just anything. All the deals and people present their deals. I like I don’t want to, you know.
Rajesh Tekchandani: [00:27:40] So I tried looking for other meetups that were very focused on syndication. Right. Right. And there were a couple of them. But I did not see myself. So I just said, okay, let me start my own and then let’s see how it goes. And so my meetup is a little different from other meetups. It’s a we have a conference room. It’s a boardroom style. Very education focus. We pick up a topic every month. And I share the topic in advance and let people know that we have limited seating. So sign up early. Sometimes I have to repeat the same topic twice. I want to keep it more engaged educational so that people can share ideas and who who should attend. I mean, anybody who’s interested in, you know, passive income through real estate or all syndication. I mean, that’s how the people that I’m trying to attract to and bring to these meetups. And some people want to, you know, grow to become syndicators. That’s fine. Some people want to just expand on their passive income. That’s great. So, yeah, that’s that’s the crowd. I mean, we don’t get too many flippers or wholesalers or people just doing sure lending private money.
Vee: [00:28:43] Yeah. And do you set this up once a month? One’s a quarter. All this is once a month. Once a month on a certain day of the month long.
Rajesh Tekchandani: [00:28:55] I mean, it is I’m trying to get to that format.
Rajesh Tekchandani: [00:28:57] It was just, you know, when I could get rooms available in my building because I, you know, use a free space that is available to me.
Rajesh Tekchandani: [00:29:06] And also try to see, you know, what works around, so. So far we have been doing it in different days, but I think going forward I’ll put in a structure to it and probably try to get a little bigger space and do it, you know, once every month on a certain, you know, like last or fourth Tuesday of the month is what I’m thinking.
[00:29:26] Last Tuesday after the month you said? Fourth Tuesday, fourth Tuesday.
Vee: [00:29:31] So this month it gonna be the 23rd, the 23rd sending in syndication demystified because a lot of people are like, what is syndication? So I don’t want to take it back to the basics in this one.
Vee: [00:29:44] Most of your meta meetings, are you teaching or do you have guests coming in and teach?
Rajesh Tekchandani: [00:29:52] I don’t like the word teach, but I’m the one leading it and sharing and I put up the slides. But interestingly, it’s very interactive. So there’s always somebody in the group that is is probably far ahead of me or, you know, and just came there to network and has a lot more knowledge than I do. And it’s very interactive. So everybody chimes in and people ask questions because it’s an it’s no judgment zone. We don’t judge, you know, where you’re coming from and what kind of basic knowledge you have or not. So, yeah, that’s that’s it. It’s it’s not teaching, it’s just sharing of knowledge. But I put up the slides and definitely I’m going forward. I want to invite guests because I’ve already have identified speakers in the Boston area or people from outside who are willing to come in to speak to this group.
Vee: [00:30:36] That’s awesome. So for those of you who are interested in learning about syndication and you live in the Boston area, you should definitely go check out Raj’s Group and we will have more information in the A show note. Raj, also, you mentioned that you run a few groups online. What platform are you using?
Rajesh Tekchandani: [00:30:57] So I use mainly Facebook and LinkedIn.
Rajesh Tekchandani: [00:31:04] I haven’t done much on other platforms yet, although I started off a bigger pockets, but I have been off bigger pockets for a little bit. I need to get back in there.
Rajesh Tekchandani: [00:31:11] You the name of your group. I see here is data driven multifamily investing. No one is apartment investing and multi-family syndication aims.
Rajesh Tekchandani: [00:31:25] That’s right. So AIMS has now two to two personas, one is the meet-up and one is the Facebook group.
Rajesh Tekchandani: [00:31:33] Awesome. So those of you who are not in the Boston area should definitely look as up in Facebook for that group. That’s right. You’re doing all this. You’re pretty involved in in the real estate world in the multi-family syndication world. Where do you see the industry’s going? Given your background in technology?
Rajesh Tekchandani: [00:31:56] Oh, that is one topic I really like to speak. And that’s one of the genesis of that group. Data driven multi-family investing. Right. I think there is a lot to that real estate industry is going to see in the near future. Right. We’ve already seen tools like a.o that are doing automated underwriting, something that used to take, you know, underwriters days or weeks could be done in minutes. Now, you know, because of, you know, machine learning and all that technology coming in. We can now we’ll have we will have systems that are intelligent enough to predict, you know, what’s going to happen five years from now based on certain enhances that you make in a property. All that good stuff is coming. And as you know, your if you have an apartment community, you know, what is the sentiment in that community that can be all done through, you know, sentiment analysis, all technology, so you can be one step ahead of taking care of your community members.
Vee: [00:32:50] That’s awesome. You mention sentiment analysis. Do we have a recommendation for a company that’s doing this? Or is Enodo also has this function? Enodo does not have one.
Rajesh Tekchandani: [00:33:02] And I don’t have a commendation. But I know I’ve talked to a lot of I read a lot about, you know, technology in real estate. And I think that’s just coming on down the road. There is tools out there. And I don’t know if an auto has it on their product roadmap or not. I mean, they’re more focused on analyzing market research and doing some predictive analytics.
Vee: [00:33:21] So besides going to meet up groups, are there any books or any podcast that you would recommend for someone who is new and want to dabble into this world?
Rajesh Tekchandani: [00:33:32] It’s funny you say that Vee, because I just like I said, I wrote up an article this morning on LinkedIn sharing all my resources, the Podcast that I listen to or I keep listening to the books that I read and I limited it to, you know, top three in all these categories. So, yeah, I mean, we can go through that or you can just put that link on your show notes for definitely now.
Vee: [00:33:54] For those of you who are learning about this and if you want to get this list, you could find it in apartment investing and multi-family syndication Facebook Group. Or if you follow Raj on LinkedIn, you will also see this list. I’m letting you know the list is out there. We’re not sharing. The whole list, but Raj. Can you give us one book from this list?
Rajesh Tekchandani: [00:34:20] So the one that can on the recent one on this list is. And because of my focus on syndication is Joe Fairless, his book on a best ever syndication book, which is very well-written.
Vee: [00:34:31] Apartment prices are at An All-Time High right now. One thing that should people should be paying attention to when they are underwriting deals.
Rajesh Tekchandani: [00:34:42] So, yeah, I mean, I mean, people are they have to be more conservative. I mean, they have to do you in your apartment and your underwriting has to be very conservative in these times. You know.
Rajesh Tekchandani: [00:34:54] Gone are the times that, you know, you could put in an exit cap rate and still achieve it, and all your IRR were jumping on 25 percent. Not anymore. In my opinion, you know, you have to be very cautious on what your assumptions are on rent growth, on your exit cap rates especially, and make sure you know, before you do your sense analysis, on you know on vacancy rates and all that stuff to make sure that you have the underwriting done right.
[00:35:21] We’re coming to the end of the show and we have five questions in the rapid fire round that we do with every guest. Are you ready for the fire round? Sure man, take it on. Awesome first question. What is the one special ability that you wished you have?
Rajesh Tekchandani: [00:35:40] One special ability I wish I had. I wish I was a better salesperson. I mean, I never you know, I’ve been always enamored by people who, like, sell anything. Right. I mean, they can sell you anything. It doesn’t come to me. I have to be already engaged and, you know, human behavior before I can sell anything.
Rajesh Tekchandani: [00:36:01] So that’s something that I admire in, you know, good salespeople. But I just have a different view of it.
Vee: [00:36:06] And then second question, which single habit give you 80 percent of your results?
Rajesh Tekchandani: [00:36:12] Well, that’s easy on networking. Talking to people without any intention of, you know, selling, like I said, just talking to people in a genuine bases, right? I mean, talk to them about anything and everything.
Rajesh Tekchandani: [00:36:26] And the results come as a result of that.
Vee: [00:36:30] Right. And that’s what I like about your approach as opposed to some slicky salesman where you may not know about a product yet. You you know, you’re pressured into buying in anyway.
Rajesh Tekchandani: [00:36:42] Yeah. And I don’t know how those guys do it. God bless them. And I wish they’re not cheating people off their you know, or. That’s my. I worry about that.
[00:36:51] Well, I mean, in this indication, what does how you go to jail. Yeah, exactly. And the third question, if, say, some billionaire sponsor and give you money to have a billboard at Times Square, what is your message that you want to put up there?
Rajesh Tekchandani: [00:37:13] Billboard sponsored by a billionaire. I would say invest smartly. S M a.r.t l.y. Because Smart Capital is my my brand. So I would say invest smartly.
Vee: [00:37:26] There you go. Now, how has investing in real estate helped fulfill your dream?
Rajesh Tekchandani: [00:37:33] I don’t know if it’s fulfilled my dream, but it’s definitely gotten me to a really happier place that I have more control on my time.
Rajesh Tekchandani: [00:37:42] And it’s allowed me to spend more time with my family taking care of other things that I like to do.
Rajesh Tekchandani: [00:37:48] It’s just it’s given me more flexibility to spend time with my parents who live in India so I can travel back and forth when I want to. Spent more time with kids who are growing up faster than we know and time. You know, my wife and I and all good stuff, that’s all. Nothing financially there yet. But but it’s going to be a lot of flexibility to be a happier place, given you a lot of freedom to take care of other areas in your life.
[00:38:17] Right. Exactly. Last question. Who would you like me to interview in a future episode of the Real Estate Lab podcast? Oh, boy.
Rajesh Tekchandani: [00:38:28] There’s a tons of names that can come to that. I will be doing injustice to other people that I don’t name there one.
Vee: [00:38:35] One person who you thing would be beneficial to the audience or more like people who would, you know, go to your meetup would be beneficial.
Rajesh Tekchandani: [00:38:47] So I like to mention my friend Vinney Chopra. He’s he’s a good fun guy. Same background as me, you know. In fact, when you live in that same city in India and here is there now, you know, doing great things that has done great things. Very inspiring, very friendly. So Vinney would be a good guest. Go get him. We’ll get him. Vee.
[00:39:09] Awesome, awesome. I will. Do you have a way to make an introduction? I will happy to do that. Awesome, awesome. Oh, I look forward to talking to Vinney Smile Chopra. Exactly. His signature smile is so great, man. Yeah. Yeah. This isn’t the end of the show. Can you share? How people can get in contact with you on follow up on conversation that we carry on in this period.
Rajesh Tekchandani: [00:39:40] Absolutely, man. You know, my website is w w w dot smart capital M GMT dot com. That’s Smart Capital Management M GMT dot com. And best way to reach me is my email are AJ at Smart Capital M GMT dot com.
Vee: [00:39:58] And we will also put this in the show note so you all will have a way to contact Raj and follow up on the conversation with him or go to his meetup and or join our Facebook groups. Absolutely. Thank you for your time, Raj. Have a great day. Thank you.
[00:40:19] Episode of the Real Estate Lab podcast. Share the show with all your friends. Subscribe and give the show five stars rating on i-Tunes.
[00:40:27] Until next time. Have an awesome work week.