Appearances, continued.

Welcome to the Multifamily Investor Nation Podcast. I'm your host, Dan Hanford. This podcast is unlike any other podcast you have been listening to. The guests on this show are true active real estate investors closing real a multifamily deals.

Whether you are an active investor looking to up your game or a passive investor looking to learn more about how multifamily deals are structured, I promise you will thoroughly enjoy this podcast. So be sure to hit that subscribe button so you'll be notified of future episodes. For those of you that are interested in investing passively in these types of deals in solid, cash flowing multifamily deals throughout the Southeast, then visit my group, Passive Investing. Fill out the investor interest form, that's PassiveInvesting.com.

If you've closed a multifamily deal in the past 12 months and want to be on this podcast, then send an email to stacy at multifamilyinvestornation.com for details. Now let's get started. Welcome to the Multifamily Investor Nation podcast. I'm your host, Whitney Elkins-Hutton, Director of Investor Education, here at passiveinvesting.com.

And with us today, I have a very special guest. Tenny Tolofari. Tenny, welcome to the show. Thank you so much, Whitney.

How are you doing? I'm doing great. Happy holidays. We're recording this right after Christmas, 2023.

Absolutely. Hope you have fun. Yeah. Well, conversation about who you are and the deals that we've done.

And hopefully your audience can benefit from the information I share today. Well, my name is Tenny Tolofari. I'm one of the co-founders of XSITE Capital, is a Maryland-based about the family syndication company. So we're three partners, the Julius Oni, Leslie Awasom, and myself.

I'm the director of a acquisition. Leslie is the director of operations and Dr. Julius Oni is the CEO of the company. So three and fours from the company in 2019.

Right now, we've been able to grow our portfolio from zero down new one, but first deal. So now we have about $168 million of asset on the management. And I'm looking forward to sharing with you one of the deals we did last year. Last thing we did about a $60 million worth of deal raised about 30 million.

One of those deals are the deals I'm going to be sharing with you and how I got started into real estate. I basically went with the philosophy that Robert Kiyosaki shared in where he said, if you want to build wealth, you have to build a business and invest in something. It could be precious matter, it could be real estate. He invested heavily in real estate.

So I was doing my nine to five job. I started a financial services business where I was selling life I met one of my partners that's already doing some form of real estate in the single family home arena. And I told him, hey, maybe we can partner up. And then we started having a conversation about real Rill estate.

And my goal is to build a business and invest in Rill estate. So having met that by one of my partner, Leslie, we decided to come together for my tech capital. And in the process while we were, we're trying to raise capital, our third partner, Dr. Judas need.

He was interested in investing. And then later he realized that this is a good opportunity for him to be a part owner. So he became one of our partner as well. And that's when the company took off.

But I can show some more story about what some of the challenges we had or had in the past, if those are something you're interested in. a capital came about from zero. And this is where we are right now. If you're an accredited investor looking for a way to generate attractive passive income without owning another rental I want to introduce you to the PassiveInvesting.com Real Estate Debt Fund.

Instead of buying properties, our fund provides senior secured, business purpose real estate loans to experienced borrowers. That means we're investing in the debt not the equity. Our current investor return structure targets annual returns of 8-10% with a minimum investment of $100,000 or more depending on your investment amount, monthly distributions or monthly compounding. And because these are short term real estate loans, the fund is designed to continually Investing involves risks, including possible loss of principle.

Targeted returns are not guaranteed. Please review the offering documents R Mm, that's so cool. Well, let's dive into the details. Because as we were talking before the show, 101 Elwood, 140 units in the Baltimore, Maryland, we were chit chatting a little bit.

And I'm like, OK, just make sure like. Let's tell the story here. You're like, oh, man, I have I got a story for you. I'm excited to hear that.

Let's start the basics. When did you purchase this property? And what was the purchase price? So we closed this deal December 30 of 2022.

We. We bought it for $25 million, $425,000. We raised about $9 million and this was a loan assumption from Fannie. Okay, so how did you find the deal?

Let's back up the timeline. Like was this lifted with a realtor? Was it off market? How did you find the deal?

How many people were competing for the deal? Actually, this deal has an interesting story. The deal was listed in the market, I think the timeline for folks to bid on the deal expired. Somebody purchased it or had it on that contract and then it fell out of contract and then the broker reached out to a group of folks that was interested in the deal and wanted us to take a look at it.

So we took a look at the deal fand time. And then after a while, the broker was back to us and say, Hey, are you guys still interested in this, I would say of course, we're interested in a deal and we went back and we won the deal. So we went to buy an interview call, lost the deal. And then it came back to us.

Basically, that's what that's the short form of the story. And we've had a lot of occurrences like that in the past in our career as well. So how did you structure your contract so much? I want to unpack that, right?

Like first of all, you know, went under contract twice with somebody else, once somebody you we would have a. A couple of things were playing for us. One is in April of last year, we bought a deal that's similar. It was a 20-23 vintage bank conversion from bank to both the family.

That's one. Two, we had a significant money for earnest money deposit as well. To me, we have the experience doing a similar kind of, creating a similar kind of deal. So when we were able to share our experience with the seller and the broker, I think the broker was the one that actually pushed on how they have think knowing that, you know, we've performed in the past and they've been able to have conversations with our references and so that we'll be able to perform.

And that's why they came back to us because in the interview, at the buying interview call, I think we did very well, but unfortunately they were looking for somebody to have more experience than us and they went with another group. But when they realized that our group was not roving, they came back to us and said, Hey guys, if you guys are still interested, I would like to give you guys the opportunity on the deal. So that's when we came back to us. Awesome.

Okay. So did you have a typical? A typical purchase sale agreement, like 30 days due diligence, 30 days to close 30 day extension. Like, how did you structure that?

Yeah. days. And how much are earnest money did you put down on the R Yes. And of course, we have still in the game in every deal that we do as well.

Awesome. I know you guys had a couple of different opportunities to look at the steel. What attracted you to the steel? What was the business plan?

So basically the deal, one big thing that attracted us to the deal is one, the location. The deal is located in a really good area called the Canton area in Baltimore. It's like five minutes away from Johns Hopkins Hospital. There's another part called Madison part is a really nice part where people take their dogs and they go for walks and stuff like that.

And it's a Class A deal. And then another important thing about the deal is it was a conversion deal from school to apartments. And like I mentioned earlier, in April of last year, we bought a deal that was converted from a bank to an apartment. And that deal is one of our best performing deals that we have.

Another thing that we looked at a deal was a loan assumption deal. Last year, interest rate was beginning to climb and it was a fixed rate debt. And we were like, you know what, if you're on the right deal, about that first. So the due diligence, the way we do our due diligence, usually we partner with our property management company.

In this case, we call WPM in Baltimore. So we work with them to go into the physical inspection, where we work all the units. And of course, we do the financial audit as well, where we look at a financial that was provided to us. And this is a very important thing for anybody that's listening.

The financial one thing that you want to really pay attention to, in the sense that you want to pay attention to the tenants, which is when I say financial audit, I'm talking about the rental that you're having, and the 12 months, which is all the expenses. The 12 months shows you the expenses that you have the property, whereas the rental shows you all the people that are paying rent actively on the property. You want to make sure that everybody that is on the rent roll and the money that they pain is actually what is reflected in your financials. You don't want to assume anything because if you make any assumption you might end up acquiring tenants that are not paying the normal or the right amount of rent or the market rent.

So we worked at WPL to do a financial audit. We work with different vendors to do a lot of inspection because the property is exterior, it's brick walls. So we brought in consultants that can help us make sure the break is in good position, good shape, the roof is in the electrical, all of those things were in good shape before we went ahead and purchased the deal had a. We had a conversation with a seller and we negotiated some price out of the asking price.

I think they knocked down 500 or 300,000 dollars from the asking price from that. But based on what the engineer said, he said it's not a big deal. You don't need to really do anything, but we just used that as an opportunity to go back to the seller. Hey, listen, we might have to spend some money because the person that's going to buy the deal later on might come up with the same issue.

So that helped our negotiation with the seller. Yeah, I think that's two pieces of wise advice that. One, make sure you're financial due diligence, you're underwriting that as strictly as you are your physical due diligence, and also do it, operators do it, but you put some words to it. What is your end goal.

Eventually to sell this property, and you want the seller, if you can, to take care of any of that obsolescence or issue, structural issues with that end in mind. So you're not on the hook for it. So I love that you kind of connect the dots for people on that. Any other surprises that came up on either the physical or financial due diligence?

Was there any issues with obtaining churns on this. Insurance was not a problem. One of the huge challenges we had was the loaners of the deal for folks that syndicate deals. You want to make a couple of things I would learn from this deal.

One is the bank that you are zooming the debt from. They usually review your company make sure your company is not crowdfunding. So by them looking at our website, they saw some information on our website that looks like we were crowdfunding. So that was a big issue between us and the lender.

So we had to go back and forth to them to let them understand that we work only with accredited investors, and we needed to provide evidence. We had to provide evidence to them to show them that we only work with accredited investors that were not crowdfunding. So if you're structuring your website and you're doing 506B or 506C, you want to make sure the information you share is clear on your website or any plan to the plan to raise an additional $600,000 that you guys can just hold and deposit for When it comes to investing your money, promises are easy. Track record matters.

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review the offering documents before investing. Before we dive into detail what you assumed the loan at, what would be an instance or an example of something on your website that for an operator that's and that would maybe be a red flag saying that you're crowdfunding instead of syndicating? So what on our website I think showed that we were crowdfunding is I think we mentioned that we work with a lot of investors and we advertise our stuff online, right? We do not clearly specify that we work with medical professionals that are accredited investors on our website.

So goodbye, but the information they gathered on our website shows that it looks like we just marketed it to the whole public and anybody that is interested comes in and then we're able to get money from them to invest. Also we denied the kid our minimum investment is like $50,000 as well. Gotcha. So just potentially adding more clarity to your website, which is, it would be amazing for your business anyways.

Awesome. Okay. So let's talk about the actual loan assumption I'm And so three years left on the loan, was there any payment penalty if you decided to sell and two instead of three, were there any lockout periods in there? No, our business plan was to actually do two things at a refinance or sell after the loan expires.

So we were not worried about like any lockout period or any prepayment penalty because we bought the deal about three a left. So we're just going to implement our business plan and then. We're just going to implement our business plan and they'll for potential refinance in case you had to go into an adjustable rate mortgage. Like were you setting aside any funds just in case this rate situation didn't settle down in the next couple of years?

Well, a couple of things we were thinking. One was if 2020, I think especially in 2026, if the loan expires, we can refinance. Now we can get to a situation where the market, the interest rate is super high and we want to refinance at a time when having to give him a certain returns, right? That's one scenario.

The other scenario is the interest rate might drop, right? Those are the two options. And then we have another option to sell. And like I mentioned, also we have an escrow money reserved with a bank about $1.2 million.

So our goal is we are gonna come in to come and improve the management and increase revenue so that we can improve the DSA hour. Once we do that, we'll be able to take our reserve that they have or the money that they have in escrow, about $1.2,2 million. That's something that we were planning to use to put in our reserve in case we get to a point where it becomes a problem. Got a problem.

All right, let's talk about raising capital in the deal. How much was your total raise and how did you structure this for your investors? So, total down payment for this deal's $6 million, $2.30 million. So an interesting thing I'm about to share with you right now is we did a $10.31 million on this deal.

In December 17th of 2022, we sold one of our deals. And from that deal, we were able to do $10.31 million or about $3.5 million from that deal to this deal, and then we raised the rest for my investors. So total down payment for the deal was $6.2 million, closing costs was about $504,000. And Oh, just how did you structure it?

Like returns and splits, any hurdles in there. Yes, we. Yes, we have that. I'll pull that out real quick.

So total risk for this deal is about $9 million. Our investors return, I think we did $75, $25, where investors have 75% of deal and we, the operators or managers, have 25%. And we have two hodles. The first hodle is we get a perfect equity.

Where we hit their pref, the splits changes to 25, 35. And then once we hit another hodle of 20% average on our return, it splits to 50, 50. Got it. Awesome.

How many tranches were in the deal? Was it just one tranche? Well, you live by tranche. Oh, just like as an investor came in and say like $100,000, they got the 7525 but if they came in and say $500,000, they got a different tranche or was there a profit equity tranche or anything like that?

Oh, I see you're talking about a different asset class. So we had just one is just one class of investors, class A investors and that's it, where they if you come as an investor after the 5% and then the general and the general partners after the 5% that's it. Gotcha. And what kind of fees did you have for this deal?

Fees. We had an acquisition fee of a closing the deal. I think acquisition fee,. We have 2.5% on this deal.

And then of course, any fee that any significant upfront. And then once we go through the process of executing the business plan and managing the property, we have asset management fee as well. And then we have a fee at the end of the deal for capital transaction fee as well. And what were those?

Our asset management fee is 1%. And then our capital financial fee R is 1% as well, a seller refinance. Now, this is a question that I usually don't ask, because we're usually holding this conversation pretty quickly after the deals close. But since you closed on this deal a year ago, tell us about the first month of the ownership.

Were there any surprises that came up during that transitionary period? Yes, there's a, huge surprise. So the one of the main surprise that we had on the property was the seller of the property did not disclose fully the tenant profile that was on the property. So one, after we took over the property, we realized that a couple of the units have been used as Airbnb, where somebody is subletting to somebody else and then they're using it for Airbnb, that's one.

Two, some of the tenant profile that we had on there were not qualified to be on the property. Then three there was addiction that was going on and a lot of those tenants that were not qualified to be there, some of them they started the eviction process but they did not complete it. So a lot of those kind of caused some issues at the start of the transition. So we had to go in the audit to make sure we kick out all the tenants that are not qualified to be on the property.

And then the squatters that we had the ones that are doing the Airbnb related situation how to give them a victory in the audience as well. And yeah, these are some of the surprises that we've found. The joys of owning property, right? And you need to handle the issues, right?

Absolutely. And we work with that property management company. They have an extensive background and experience in that market. So they're helping us navigate a lot of these issues, especially with the laws when it comes to eviction and how to manage some of the sentence short term rental, all of these things.

They're helping us manage a lot of those very well. Awesome, well, Teddy, I have two questions for you as we wrap up. Was there something that you thought was going to be easy during this process that ended up being harder than you thought? And then let's flip that question around, was there something that was going to be incredibly hard that actually ended up being pretty easy?

I think what was, I thought was going to be easy was a loan assumption piece. Because we just did it in April with Fannie. I think we used Abort. Abort was a company that we used the custodian of the loan, Abort.

And this is what's P and C Bank. crowdfunding, increasing our escrow money, and all of that stuff. It just became a complete back and forth between us. And one of the very important things that I did not disclose earlier was we never had a call with the underwriter.

Usually when you are zooming in debt, or when you're getting new debt, you have a weekly cadence where you have conversations with your debt team to see what's going on, or if they need any document from you. But in this particular transaction, we never had one call the underwriting team, which was really bad. So we were asking for it. They never wanted to set it up.

We don't know what any reason why they don't want to have that meeting. So that was one big challenge that we faced. We had a lot of challenges. This is just some of them.

And of course, that's what the operator, how they earn their stripes and earn their income is ring. It's taking care of those challenges for the passive investor. What did you think was going to be harder that actually ended up being easier? What I thought it was going to be hard that became easy.

In this deal, everything was hard Because we did a 1031, we closed the deal in November, and then we're selling a deal and we're buying another deal in December. So everything was chaotic. I think working with the brokers was easy. They made our life easier.

And we were able to provide guidance on how to navigate Just being able to walk with them closely to navigate some of those challenges. I think they were always ready to have a conversation with you. Even if it's 8 or I want to get on a call to try to help you navigate a lot of the issues that we, we're going through. So I would say that communication with the process was the best spot fit.

Awesome. Well, Tenny, thank you so much for being on the show today and sharing your knowledge and expertise with us. If listeners wanted to find out how to get ahold. How can they do so?

Well, for you to get ahold of, we have XSITE Capital. Like I said, my name is Tenny Tolofari. I'm the only one online, that's T-E-N-, N-Y, and then Tolofari is T-O-L-O-F-A.A-R-I, My company is ExciteCapital.com. X as in Xylophone, S as in Samwell, I as in Indigo, T as in Tango, E as in Edward, Capital.com.

There is good find everything about XSITE Capital there. Awesome. Well, again, Tenny, thank you for sharing your time and knowledge with us here today. We look forward to hearing about your future deals.

Thank you so much with me for having me. Appreciate it. Thank you for listening to the Multifamily Investor Nation podcast. I trust I enjoyed this episode.

Take a moment right now to leave us a review and let us know what you learned. Also, don't forget to visit PassiveInvesting.com and fill out the investor interest form to invest alongside me and excellent multifamily assets located across the Southeast. R That's passiveinvesting.com. Thanks again for listening and we'll see you on the next episode.

We bought the property for $12.55 million and we sold it for $17.8 million. What does it take to do a multi-million dollar multifamily deal? My guest today is Leslie Awasom, the director of operations and co-founder-founder of Capital of operators were riding the market. You have to factor both of those into your success, but.

You have to also remind you that there's some people that lost deals during when the market was up. Keep listening to hear his response. I am a trained nurse and a status. And I still practice as a nurse and a status on a part-time basis.

And like most people, we thought the way to get to the American dream is the traditional path of going to school, getting a great job, earning an income and then taking care of your family, which is what I followed. So I chose the career where, I believe will give me the ability to be able to take care of people and have a stable source of income for my family. And so that's how I find myself into nursing, then finally advance to, went back for more advanced studies to get into nurse anesthesia. And it was, it's a great job.

I'm very grateful for my job. I've been in my current where I work at for the last eight years throughout my whole career as a nurse in the studies. I'm very grateful for that hospital and for the job that I have and for what it's been able to do for me. While I was working like two years into my career, I just could not see myself doing this over and over going through that same motion of doing this getting a paycheck over and over for the rest of my life.

later on learned in life is like I am a growth motivated kind of individual where if I find myself in a situation where there's some kind of a ceiling I don't feel like I'm living up to my full purpose. So those were those feelings that were circling in my mind two years into my nurse anesthesia career, and then I stumbled across a book on investing by Robert Kiyosaki actually is called second chance at your money. R.I.P. I read the book and it opened my eyes a lot to investing and some of the struggles that I was having at that time as a millennial student loan debt and all this other stuff.

Give me like a brief understanding to the U.S. financial system just enough of curiosity for me to be able to go in and dig. And the book also give recommendations on what I could do. So I just follow that path and just open this wealth of knowledge and growth that just came along with it.

And along the way, I discovered Multifamily Investing, which was like the perfect path for me because it required me to grow significantly as a person. It also gave me an opportunity to be able to provide a tremendous amount of value to a significant amount of people, which is something I was very passionate about. So that's how I found myself every year and founding a company that has grown significantly over the last four years. love that book, Second Chance.

I read that Robert Keith. He's one of my favorite books of his. I like fake money, fake teachers. That was awesome.

He's one of my favorite authors of all time. And I'm really glad that you brought up your aha moment almost in that career, because I think a lot of people can relate to that. And. In the past, I've heard you reference this misconception that you had, and I know we had had it as well when we first started in real estate.

And it was this notion that you could make more money or see more success much faster than that you really can in reality, it's a much slower burn. My brothers and I are always joking, like this is a long-term play. And it's not even a joke, it's true, but we always have to jokingly remind ourselves. And so I wanted to know with that.

Being said, how many deals did you have to look at? Today, I really said this yet, so I'm gonna say this, But, we will be diving into a deal that you went full cycle on. We'll explain what that means before we get into that. I do want to kind of just clarify, provide some context as to how much work went into finding this deal and the reality of finding this deal and how that ties into that misconception you had.

Yeah, every deal that we've had to work really hard for. And again, is real estate investing is not buying real estate. That's a difference. That's a key difference.

Right? If you're buying real estate, you could buy whatever you want whenever you have the money. But if you're investing in real estate, you got to find something that will actually heal the returns that you're looking for. And for us, where a majority of our investors are, like our colleagues, people that we work with in our career, we are very diligent in how we find our deals.

So my first deal that went full circle on that we're going to talk about today, we're probably on the about 250 deals before we were able to find this deal. reviewed 250 and did a full on the writing or maybe about a hundred before were able to find this deal So like you said Karen, it's a it's constant effort over time that wins One of our mentors usually says it's like an inverted pyramid at the bottom You got to put in a lot of work and then it gets better over time But it takes time. It's a long-term game for sure Absolutely. My brothers and I have also before we did our first deals as lead sponsors We look at hundreds of deals and I know I believe it's probably harder now, but it was always hard in general, you know, so it was never easy.

And it's definitely a game of persistence and sticking to it. And you have succeeded in going full cycle on multiple deals. The one we're talking about today, I believe is called the view at St. Andrews in Columbia, South Carolina.

Um, starting off, I do want to maybe have you define what does it mean to go full cycle on a deal? Okay. That's right. current.

So, correction, we've gone full cycle on one deal, which is the US and Angles. We've acquired six other, five other deals over the last four years, but having gone full cycle on the others. So, full cycle essentially is like acquiring the deal, managing it, implementing your business plan, then leading on to the end of that business plan and exiting out of the deal. Like, R accomplishing your business plan.

So, yeah, so for that deal, we acquired it in April of 2021 and we were able to exit out in December of 2020. We met, superseded our business plan projections and felt it was a great time for us to exit. I love it, man. Thanks.

So without getting into too much detail, let's just introduce the view. Can you tell me a little bit about where the property is and maybe like the unit size of it? The view was a classy C plus property, 132 that it was called Churchill at St. Andrew's and we actually rebranded it during our hold and did all of the work that we did on the change the name to the view at St.

Andrew's. So let's start with the market. I know there's a saying Grant Cardone always says location. I know a lot of people say that, but I've heard him say that a lot.

And so it's no secret that the market is one of the foundational factors that you have to take into account when you R looking at a deal and analyzing it. So what attracted you to that market of Columbia, South Carolina? And what were some of the strong characteristics there? Population.

There's a great population size in the Columbia MSA. Then we started to see, most of the state of South Carolina has experienced a lot of growth over the last five to 10 years with South Carolina at the time back in 2020, being ranked as the fourth fastest growing a state in the US. But a lot of that growth had been happening in the Charleston area, the Greenville, South Carolina area- not as much as in Columbia, but Columbia is the capital city of South Carolina. So we started digging into Columbia to see what the drivers are what the future holds in Columbia.

I actually went down there had some conversations with the EDC, that's the Economic Development Council, and felt like the EDC was. At that time, Columbia had commissioned like a study, I forgot the name of the university that did the study on how to grow Columbia over the future and they came up with some really good pointers. Now when you start seeing stuff like that about cities, you know, these are cities that are transitioning into a more progressive side of that. And the EDC was very welcoming to us as investors.

So we looked at population growth, the market was growing in population, median household income in some of these pockets was really good. So it's a nice, stable, secondary market that we like. We decided to start looking at some assets over there and make it one of our main markets. And you mentioned it was a Class C property.

We're value add investors. I know I believe you are as well. Just for context, a value add investment is any commercial property with existing income but significant opportunities for improvement, operational enhancements, market repositioning or redevelopment. I wanted to know like what were some value-add opportunities at the property that you're referencing?

Oh, absolutely. So we bought this from an owner that we've actually bought another deal from and he has a reputation of identifying great assets and just holding and not doing anything so it really had a lot of meat on the bone. This property was built in the 70s and no major renovation had been done to the interior the exterior where the roof had been changed Rents were growing. Our rents were like $200 below market to organically then close the value add.

So we saw an opportunity where we could come in, upgrade this property, take it out from the 70s and bring it up to the 2020s and bring in a little bit more nicer amenities, make the units more up to date and be able to capture some of that debt that we're going to be able to do. I, and then bring in a little bit more nice amenities, make the units more up to date and be able to capture some of that which is exactly what we did, starting from the outside, then started moving in and which was a very successful business plan. I've heard an investor? I heard an investor say once that every deal has some hair.

And what he meant by that was that every deal is going to have some issues or it's not going to be a perfect deal. There's no such thing. And so I'm guessing that, you know, this sounds like a great opportunity, but it wasn't a perfect deal. I wanted to know, were there any red flags that maybe you had to overlook or realize like a way to mitigate before you went through with the deal?

Absolutely. So one of the things, when we bid on the deal initially, we came in second place, the person that won the deal backed out because he went and did a news report about a flood that was on the property. So we went back, we were worried about the flood, went in there, did a due diligence, stuck to the city. So we realized that the flood was caused because That's a drainage area that was that dirt that blocked it.

Wellwater usually drain during heavy rainfalls and it had not been taken care of like they were not being proactive on taking care of that. So that's what caused right, Cohen. Um I usually tell my partners, I usually tell everybody that I think I heard this from Peter that every I have to be humble enough to understand that your performance is always 100% wrong. It's always wrong all the time, right?

So, but you want to be conservative or not so that is wrong in a good way. So, um there's always surprises that come like when we close the deal, two weeks after we close the deal, there was a fire on the property. like we had actually gone to Atlanta to celebrate as a team then we were driving back to stop by Columbia to the property. And on the way over there, the property manager called us and said there's a fire on the good.

Now you could imagine all the thoughts that we're going through, but we will calm down. Thankfully, nobody was hurt. Managed that very well. Insurance covered the damage and we were able to renovate that unit and I rented out for higher premium.

So those things will always come and you're pro forma, you're going to meet them. And the other surprise that we got was the change in the expenses. Inflation came, we were budgeting $7,500 in renovation, but with COVID and the shutdowns, everything went up and we ended up renovating at about $10,000 per unit, which was way higher than what we projected. Yeah, I was going to ask you about, because like you said, you can have the most conservative underwriting as possible and have a bunch of levers you can pull, but in reality, no one can predict the future.

No one has a crystal ball, so you really don't know what curveballs you're going to get thrown during the business plan and your implementation of that. Can you expand on the business plan and your process, your experience during the whole period and maybe some of those challenges that you didn't foresee? What were they and how did you pivot? Oh, absolutely.

So there were challenges and there were a lot of great things that happened as well during our whole that were not part of our business plan. For example, when we went in, we on the road that rent growth was going to be about 0% year one and then year two start going to 3%. But then with COVID, everything went with inflation, rent started shooting up. We were getting rent growth of about 10% to 15%, which is not something that we on the road.

I also talked about the renovation costs, which went up higher than what we anticipated and the other thing too that work actually worked in our advantage was um at that time we bought this right in the middle of covid so the lenders required a lot of reserves they require covid shutdown reserves this other reserve that other reserve but with all those underwritten in the deal still worked but eight months into our ownership those guide guidelines became loose, so those reserves got returned back to us. So the property was a very well capitalized to really weather like any kind of storm with all the reserves that we have because we had the covid, the reserves that other lender reserves then had our own operational reserves. So any changes in expenses we were able to manage. The other struggle that we had was with our team employment.

Our maintenance person had to leave left in We had to be borrowing maintenance people from other properties, which made the cost a little bit higher. So those were some of the main challenges that we faced with the business plan. But the great thing is with every business plan, you got to have reserves, mitigating issues so that when things go that way, you have something to fall back on. you have to consider and structure.

What was Unfortunately, our KP had a lot of experience, and we're very much involved, so they helped us work through that process. So financing for this asset was smooth, and raising the capital too for it because we have spent a lot of time educating, giving a significant amount of value. Going back to what you said, it's a long-term game. We have been in business for almost two years, working hard, working the pavement before we were able to even close this deal.

So, all that work came to fruition on R.I.C and when it was time to raise capital for the deal. I love that. You R.I.C. were an overnight success that took two years.

It's still working, R.I.C. Absolutely, man. So this isn't necessarily a spoiler because we've already said it, but you obviously went full cycle on that deal and sold it on the back end. I know some would argue, I've heard this, that you don't really earn your stripes in the space until you go full cycle.

So that's really awesome that you guys were able to do that. When it did come time to sell the asset, what factors influenced that decision? And how did you determine it was the right timing? So when we have an asset, we're constantly evaluating the market.

Because again, our number one goal is to save our investors. Don't lose our investors' money. The second goal is to make sure that we grow their wealth over time. So we're constantly about letting the market to see where things are.

We had a good position where we can exit, so at that point, we had completed all of our exterior renovations. We had gained a significant amount of growth in income from the organic rain growth, and we had been doing our interior renovations as well, and doing great premiums. So our initial plan was to renov R74 units, but we had done about 32. So during our BOV on the asset, we saw that we could hit the numbers that we projected to exit I EFI in 21 months at that point in time.

So we made a decision to exit because the other reason for doing that is because 90% of our investors, this was our very first time investing in multifamily syndications. So having that proof of concept for them to be able to see that able to grow their wealth and be able to do this and do this safely was very important for us. So we saw this as a great opportunity to return capital to our investors to investors. Give them some of those gains and for them to do whatever they want to do with it.

And actually, most of them actually ended up 1031ing with us on that asset to another asset which we purchased in Baltimore. You underwrote it with a plan to exit when you did or maybe a little later than you were able to. But I know there are some investors, multifamily operators who will raise capital and do long-term holds. So like 10 years, 30 years.

And that is what they want to actually be building the long-term wealth holding the asset. Whereas with the more short term, I don't want to call it a flip because it's not the same as a flip, but you're essentially doing a shorter hold period. What's your philosophy with that? Does it make more sense for you?

And is it just because you had to because of the investors or do you prefer to really be moving from one asset to the other and growing the wealth that way versus just holding that same property more long-term? So it's going to be a mixture of both. So it's asset by asset base. There's some assets that we identify and we say we're going to hold this long term.

We want to do that with our investors, give them an opportunity for long-term-term wealth and to hold onto this asset for a very long period of time. So as asset specific, some of those assets are ideal for like a value add plan and exiting and moving on to something else. Some of them are going to be better for a longer term hold. So we educate our investors on both business plans.

I believe this year in the coming years, we're probably going to acquire a few assets that we're going to hold for that 10 year long period of time as well. So again, the asset determines what plan we want to go with. For more context, can you actually, just remind us, what was that property purchased for? And then what did you end up selling it for?

Absolutely. We bought the property for $12.55 million and we sold it for $17.8 million. dollars they would appreciate it by So this is obviously a success and for both you and your investors Aside from the profits that you made on this deal. I think it's more value than that is the lessons that you probably the lessons you collected and learned along the way and so any Thing.

That you'll do differently with any deal moving forward. I would say probably would have I said much earlier being a little bit more put food in the market at that point in time to buy, we were very careful, a little bit too conservative sometimes, which is good, that worked out really well. What else? It was like a really great business plan, great opportunity.

Obviously there's always a lesson to learn, like some of the examples that I gave you, but overall it was like a really good process. I learned a lot of positive lessons, especially about the power of partnership, the power of surrounding yourself with a strong team and people that are better than you in every category. One of the reasons that why we were so successful in that asset is because of the partners that we had on this asset. For example, Chris Lento, EM Capital, whom him and I would manage the asset management team.

It's just a brain and a genius on the operation side. So we're able to piggy back on some of those experiences and avoid some mistakes that you could make without having that experience. So that's one of the most valuable lessons I learned from this asset, that is the power of our partnership and building a strong team. So it's not really a question because it's know what you're doing and deals exceeded because of the team like you just said but there's this sentiment in the market right now where people are saying that oh look the only reason that these deals are performing so well or they were performing so well is because of the market and a lot of operators were riding the market and the appreciation that it was seeing and now that that's not really happening so much it's the time of the operator the age of the operator is now and we'll see quote unquote who has been swimming naked once the tide rolls in so with that sentiment.

Can you maybe just show your perspective on that? Absolutely. You have to factor both of those into your success, right? But I have to also remind you that there's some people that lost deals during when the some deals that did not give returns when the market was up.

So why does that sentiment that everybody was just closing deals, you know, so you got to give credit to the people that exited the deals at that point in time and that did well because it took some amount of operating the asset to keep it solid at a period of time. I know at least a couple of assets that ended up selling during when the market was at its peak but the investors ended up not making any money off of it. It's correct and this and I love it because it's bringing the best friends out of And I had thinking of different strategies but and all this experiences that we have guess what it doesn't go away current, Karen Things are not gonna be this way anymore So moving now into the next cycle you earning this experiences that will take you on to be successful in the future the operating side I love it, we're not afraid of the operating side because we believe in the power of educating ourselves, having the best team, the best people on site that we could work with to operate this asset. So we've been experiencing that ourselves, tightening stuff in our various assets and making some great improvements.

So it's challenging, but I actually love it because it's bringing the best out of us. Yeah and so is your acquisition strategy right now in this current environment of, I don't want to say high interest rates because it's always relative, but high interest rates that are increasing at a faster RATE, as well as the economic uncertainty and just the shift that's happening in the market right now. Has your acquisition strategy changed? And maybe you did touch on this, but can you emphasize or expand on R- any- So if you have a deal out there reach out to us at XSITE Capital.

We always looking we're not sitting on the sidelines Again, every deal. Goes through the same rigorous on the writing process like we do we make the same rigorous on the writing process like we do we make adjustments based on where the market is at we use reliable data sources like co-star and all like real page to do our analysis and do our projections and tend to stay on conservative side and if we put all of those systems in place and it still makes sense. We know that the risk going in is low. We're going to take it on the contract.

As regards to some of the operational changes that we're making, again, one of the things that we've learned in business, not just in multi-family, two of the most key things that you have to think about is innovation and marketing. You have to be innovative and you have to market your assets. Right now in this age of like high delinquencies, low vacancies, that's where the marketing comes into place. So we're using different strategies in one of our assets.

We used an influencer marketing strategy to really target that same demographic that is appropriate for. That asset and starting to see some success to that. We testing other marketing platforms for some of our other assets and using other kind of marketing systems to be able to see what kind of response we're getting from it. We still maintaining the same kind of standard when it comes to KPIs and keeping our property managers on track with everything.

I'm doing more frequent trips now to our assets. Thankfully one year in Baltimore I just visited it this morning. Our asset in Atlanta I've been there twice over the last month. Again, so the asset that requires a lot of work we're there on the ground with the team, making sure that the team has everything that they need to succeed in supporting the team and building this strong team around us.

So for me, it's really been a fun process, believe it or not because I'm enjoying what we're learning along the way. I'm enjoying some of the changes that we're able to come up with, the things that we're able to try and then seeing the results happening on the asset. So it's a good experience. Yeah, so you could come to a website which is www.xsitecapital, that's X-S-I-T-E, capital.com.

Or you could follow me on any of the social media platforms. My name is always Leslie Awasom and Leslie Awasom on LinkedIn, Facebook or Instagram. Reach out, connect, let's learn more about you as and find ways that we could give value to each other.

Welcome to the How Did They Do It real estate podcast. Have you, ever wondered how people succeed in real estate and what, if so, this podcast is for you. Your host, Ceyla and Eileenalene Pratt, interview top experts in the real.r estate community to share with you their real estate journey and how they achieve massive success. Our goal is to provide you with valuable real estate resources and to help you apply it to your own real estate goal.

Thank you, everyone, for joining today's episode of How Did They Do A Real Estate Podcast. I am your host, Syla Prag. Today, I am a honored to be joined by Tenny Tolofari. Tenny is the director of acquisition and co-founder of XSITE Capital Investment LLC.

And he is a husband and father of three beautiful children. He and the Xi Capital team host a rapid-growing multifamily focus a meetup in Maryland where he provides resources and advise you to individuals interested in growing their wealth and changing their financials future. Within the last three years, his effort to your audience here, for sure. That's awesome.

So Tenny, for our listener, can you please share a little bit more of your background and how did you get started with real estate to begin with? Well, it's pretty simple. I re-immigrant from Nigeria. I have my bachelor's degree in electrical electronics engineering in Nigeria.

And then I a came to the US for grad school where I studied cybersecurity. I got into the corporate world. I'm doing cybersecurity right now for a decade. And then in 2016, money, all the way to preserve wealth is true real estate.

So I wanted to get in and me and Leslie decided to get together and start XSITE Capital. So in that process, as we're going through, start the XSITE Capital, trying to figure it out. My other partner, who is our CEO right now, Dr. Julius, I was like, I'm interested- what you guys are doing, I'd like to be a part of it and capital where we are right now.

So it's 3D co-founders, Dr. JulES UNI, who's an orthopedic surgeon. he's the CEO and co-founder, Leslie Awasom, he's the director of operations and one of the co-founders. And then myself, I leave the acquisition of the assets here, at XSITE Capital.

That's awesome. So you mentioned b that you are focusing on the acquisition side of things. So for our listener who's turning in for the first time, I assume you guys are focusing on multi-family, correct? Correct.

It's tricky for the family right now. And then for the acquisition team, can you share with our listener what does that mean? You're focusing on the acquisition. Yeah, what acquisition means is pretty simple..

We're the ones that source the deal. Basically, we identify the kind of deal with what I'm looking for. We identify what markets have that deal. We build a relationship with the key stakeholders that runs that market.

And then we over time have them send us those deals. We review the deals, see if you meets our investment criteria, see if, after we're on the right to deal, meets our investor returns metrics. And then if all of that checks, we put in an offer on the deal, and then we acquire the deal. And when we acquire, we.

We move that whole operation city to the operations management is what Leslie leads which is the operations and management of the assets. The acquisition piece ends when we bring the deal, into the company, but from identifying the deal, identifying the market, going out there throwing the deal, doing due diligence, And all of that stuff is all part of the acquisition. Got it. And then which market are you guys focusing on right now?

We're focused on the Southeastern part of the US, which is North Carolina, South Carolina, Georgia. We've looked in Florida without any a market R, where we're focused on where we're building a lot of team and putting a lot of resources on is the Southeastern part of the US, which is North Carolina, South Carolina and Georgia. So you mentioned that one of the acquisition teams So, you're focusing on and identify South East of the United a state. Why did you guys select those markets?

Yeah, it's just data. If you observe, Rif you tracking you all data migration or population migration, you see that a lot of people have been moving from the nuts of northern part of the US or R. Maryland. And if you look at if you go to Google right now, people migrate into Charlotte, North Carolina, you see that close to 100 people are moving to Charlotte every single day.

If you look Texas they want to get is where to stay. Right. And if we as a company can be a nice multifamily asset for them to kind of leave-in, that's a win for us. So that's why we're focusing those markets.

And a lot reason why they're moving these markets is because there's a lot of things that there which is like job growth in that market going R&B, you drive by. You use brokers. You work with different types of people. You use wholesalers.

There are different ways that you can get a deal. But for an exciting company, that we acquire. So far, a lot of deals we've done has been off market. Now, there's something called off market deals and off market deals.

Off market deals are deals that the brokers have not listed on their website and pushed out to the entire public, whereas, on market deals are the ones that they put on their website and they pushed out to the entire database for them to see. But in order for you to get off market deal, you're going to have. You, The reason why is because the brokers bwants to make money and the sellers, they want a very seamless transaction. .

For you to get an off-market deal. The workers have to know that, you can execute buying a deal. So that's how that works. What are some of the things where you use in order to build a good relationship that relationship with the brokers?

I know based on my experience, brokers, they are so busy. They want to make sure that they're working with a serious buyer, someone who actually can't execute like you just mentioned, How do you can? And how do you show that and the strategy that you come to make a great relationship with a broker. But that's a very good question.

That's critical. First thing you want to do, you want to make sure your reputation is good, you have some kind or some kind of bandwagon, some kind, that they can they know that this the right. So those are some of the things that we do to kind of be relationship that we want. And then.

the broker's website, identified deals that they have on the market, and then we schedule a tour because the number of tours that they do, that's what the seller wants to see. To know that people are interested in buying the deals. So you want to be a part of that group of people that have gone to tour the deal. So if you do a lot of.

Those stores with the brokers, they see you as somebody that's interested. They have a lot of people that call them all across the country. A lot of people call it from California, from New York, from Nebraska, from wherever, they have not seen them. But if you're one of those people and they go to all deals with them, now it's real because they.

Because now they have breakfast, tour deals, submitted offers, and there's a whole lot of things we do on a constant basis. from the of the broker.. Is it a first try or second try. Or are you looking at on market.

and providing feedback before you actually seeing deal, it And maybe one of them meets the action of the price, submit. Then an offer deal a deal is closed. There's no touring. There's no, oh, and there's a lot of showing all of that spoke.

Now, you mentioned about providing feedback to the broker, right? So for our listener who actually tried to get into much i family for the first time, what does it mean by providing feedback? I To help them back to the seller to provide feedback on what people are saying about that particular opportunity. So that's till what it is.

A lot of deals we've looked at, the current climate, the high interest rate. and I R feedback to brokers. contact Adam Adams. earnings is June of 2023.

How is a enough to provide those returns to your investors by doing these deals, have investors, that in the game, there's nobody doing 100 unit, a 200 unit deal, that's doing it by themselves with their cash. A lot of people just maybe exceptional people that have a lot of money on liquidity and net worth or whatever, but a lot of, in most cases, people work with investors and enough for you to work with investors, you got to give them returns. With this current climate, a lot of offering on the same deal are trying to serve the investors and if the return metrics doesn't work, they go back and provide have feedback. So in this current market climate, a lot of feedback on the brokers are expecting that.

And they use that to go have a conversation with the seller to set an expectation before. Right, to set the expectation. So it's a matter of the seller is on the real time with the market, with the buyers or not. Like you see quite a bit of a gap between what the seller is expecting, possibly like a two or three years ago pricing and what is the market can offer currently with the market, right?

And you mentioned that you're making sure that the deal is cash flowing, you'll be able to pay the investors buying a 200-300 units and making sure that it's cash flowing in order to pay the investor. For your company, what is the underwriting criteria right, especially in the current market that you're looking for and making sure that it's working, if you can share. Oh, of course, absolutely. In our deals, our gold ground, our holy grail of our deal is you want to give investors 2X their money.

What does that mean? You invest a hundred cash flow, which is cash-on-cash, and then one is the average owner return that you and then one is the average owner return that, which is where.. cash and cash. And the one is the average owner of a return that you make on a yearly basis on your money.

Usually our range ranges is 6- to 8 percent. And then average owner return is between 17 to 20 percent total return R and the total average return is a combination of the cash flow and upside on yourself. Our business model is value add. What does that mean?

is going to the property to do force appreciation. So that force appreciation, that is the upside. And so when you get a cash flow of say R between 6 to 8%, the difference we get at what we sell. So, what about in terms of the underwriting assumptions itself?

Have you adjusted anything like Charlotte, North Carolina, and a bunch of other markets right now and we're doing 1-2% growth in those markets. Cap So we've made a lot of adjustments based on what's going R.A. Got it and for a lot of writing, what are your, how many years are you guys underwriting to ," but we've dealt a lot more on the exits, so... Got it.

In terms of finding the deals, you guys found the deals, and you really like the deal, you submitted the offers and then, it's accepted. days, or 15 days due diligence and closing is the seller market, the buyer market right now. A lot of r people are not putting in that and you're constantly, so we can put any kind of financial contingency they will not have a list to offer. But now you can put that in, you request for early and usually very light.

We're not very aggressive as everybody. One of my mentors say this is the era of the lowball offer. Try to get that low as possible, right? Yeah, so but again, you know you want to be competitive you don't want to be you don't offer Our deal will Got it, that makes sense.

And so, Tony, is there any things regarding sourcing a deal, building a relationship with the brokers that are doing our conversation that I haven't asked that you would like to share with our listeners? what company or which the most transaction in the market. Now there's two philosophy to this. The, first is me, I want to buy a deal in this market.

I want to deal with the top broker in that market. The other philosophy is I want to buy a deal in this market. I want to deal with the How do you find these individuals R that list. That list shows all the commercial listed brokers that are recognized as a power brokers for those for that particular market.

So we have retail, we have office space. We have top sales brokers. And how do you do that you can connect to them on LinkedIn, or you can You go that he, he's going to see you as a player. Now he doesn't have any option, but to try to give you a deal for you to buy.

So that's what we've used at XSITE Capital to buy all our deals. All the brokers who have worked with all past power brokers in all the market that we've worked with. And it's worked every time. So that's, one thing I would like to share with everybody today.

If they implement it, it's going to give them a lot of success. Thank you so much, Tanya, for sharing that secret. Or you call it not a secret, but I appreciate it's our holy grill. And again, one of our friends, One of our core values, the abundance mindset, that, I haven, serious for me to put anybody in there that person have to a reach out and Hey, I'm a serious syndicator or a serious person.

I'm also by my family asset and they will can invite them into the writing class because we don't just want to have anybody in there. So if you're interested, please reach out to us site capital dot com and. I need to that list so that you be informed on the writing class and when you come on the writing class, you understand how to find the financials, We provide a copy of a variety model, you get it,. Play with it, understand how the business work.

And that way you'll be able to understand how to submit offers on deals and then how to win deals on there as well. That's awesome. If our listener want to find out more about you and your company XSITE Capitals and also want to get involved in the underwriting course with you. I as in Indigo, T as in Tango, E as in Edward, capital and one of my colleagues reach out to you based on what your needs are and get to involved in the un-writing class.

That's awesome. Tenny, thank you so much for spending time with me today This has been audience. Thank you. Have a beautiful one.

And thank you for listening to our podcast today brought to you by Boniface Capital. and build long term wealth, check out our free apartment syndication due diligence checklist for passive investors at bonavestcapital.com forward slash checklist. Sale and I created this checklist for ourselves as we evaluated different multi-family syndication opportunities as a passive investor so we would love to share with you so you can use as a resource as well. Download your free copy today at bonavestcapital.com forward slash checklist.

Lastly, to learn more about us you can go to bonafbef-capital-dot-com and fill out the contact us page so you can speak to us directly. Nothing on the show should be considered as specific personal advice. Please consult your legal, tax, and real estate professionals for individualized advice.

Here in Key West, we were out before it was in. In this open and inclusive paradise. You can be yourself, make new friends, and savor our live and let live vibe. With LGBTQ plus friendly accommodations, our legendary nightlife, and year round activities and events, it's always a good time to come, as you are.

and particularly it's a team sport. I mean, you need a team of what brokers, lawyers, you. You know, lenders, you know, property, managers, account, accountants. You know, this is a bunch of players that have to kind of interact, to make any deal possible.

So to really get to the apex of it, to really achieve your goals, you need to like develop relationships. You need to kind of have a 10 player mindset. It's so difficult. .....

R. R. R needed to possess.. Now it a time for the show.

So We're back again. The second part of the episode with today's guest, I need you, if you have not heard part one, you'll be lost with what they're about to say. But in any case, you need to hear R the whole conversation. This is why we split into two parts.

There's so many nuggets, it's so juicy. Go back and listen to the first part. With that, we're gonna move over into the real estate side of things. My partner, Leslie, it still works a CRNA, you know, but not necessarily full-time.

My other partner, T share how they can have that passive income coming in, but what you are doing is not passive, because you are an active operator. So how in the heck do you have time to do that? Well, you have a young girl, a 10 month-old- She's 22 months old now and I have another one. I have a five month old.

Yeah, it's a beautiful thing. But you know, because I have a you two I'm still working. Working Fulltime and I have two young kids. I have a two-year-old and a four-year-old, two daughters and they run me ragged and I'm doing real.

I'll tell you all the secrets. I'll tell you it's the power of community. I'm in, the community of one, my partners, you know, both Leslie and T it were, the most amazing partners. I'm able to leverage their time, the energies, the resources, the incredible knowledge, their ten, their persistence.

I'm able to leverage the level of that to advance our new goals of educating people in our community about- the asset class that we are experts in and also helping them to create wealth as a result of that education. Without them, there's certainly no way to do this. And also, we've also hired to make our lives much greater. We have an incredible team, r including Braden.

Hide, who is our investor relations associate, who just is amazing and incredible, including Macy price, our marketing specialist. So, I mean, we. Hired very well. We a quick to fire when people are incompetent and we we've been slow to hire.

And so what that has helped us rdo. a great team of people are literally working on a daily other accountable to those. And that's kind of the type of ship we run. And also we implement attraction.

Are you familiar with attraction? The entrepreneurial operation system? Yes, on my R list. I have not read that one yet.

So, absolutely.. So that is what magic for us. we literally implemented that. And since that, I mean, we have done close to $100 million in acquisitions since then.

And it's incredible. It's been a game changer for us. Because we have a total of about $125 million in acquisitions so far, four deals, two as lead general partners and lead sponsors, and two others as co-general partners. But I mean, we stay on top.

We have goals, and we figure out what we need to b-achieve those goals, First engineers those steps and we go at it. What do we need to do on a daily basis? What do we need to be doing on a weekly basis? It's also very intense when I decide to do something.

You know, I would have to create a list of 500 people and call for 12 to 14 hours on a weekend day just to get like a small fraction of them to invest in our deals. Now the investors do the job for us because they now are getting their distributions, they see the proof in the pudding, they know like and trust us and so they are willing and ready to invest with us and bring all their friends to invest with us. So they are actually our best advocates and they go out there and tell their Columbia, South Carolina. And then the way we do that is just, you know, I mean, obviously.

When we. You know, but now it just happens over time. It's the power of community. That was a great example and just explanation of your team and how you built it and grown.

And, I may have to like. Pick your ear off line more about how to grow from a company of one to that one team and, like working with people on a consistent basis would be great. And so I'm And one of our goals is to help others create as many XSITE Capitals as we can out there, you know. So that's why- where, When you I my primary goal is to educate, right.

And so either you invest with us or invest with others, but as you, the r the person in our community is investing and growing, your wealth, and a, the next level, my job is done, the universe has a special way making that spirit of abundance pay off in too many ways. And I'm a testament to it. Yeah, same here, I completely agree with that. I and you need that.

I can leverage their energy, their that network, everything, deal, and I and became an equal partner, and then we took off after that the four months after R - of a So, you know, we I multi-family more and even because you had done a few single families and now scaling into multi-family because you have these other experiences and there must have been something very particular or eye-opening about. It that drew you in. It was just the power of the economics of scale. You know, when you think about so if you had a single home that you were ranking out and you can't find a tenant right away to fill it up, or you would transition in between two tenants.

For that one month, you have a zero occupancy, rundr% vacancy. You are paying your mortgage that month. That, too. That money is coming, it's coming out of your pocket.

Now, let's just double it up, you know, let's go to duplex. I have a dup. You know, one tenant is, it's out of one, but one tenant is still in one. you've only got about 50% occupancy.

If you make it a quad, now you have only a 25, 25% occupancy, just one tenant is out of there. You still have a, I mean, 25% vacancy, right? And 75% occupancy. And so that same tenant not being there, if you have the quad, has less impact on has less impact to pay your mortgage, cash flow to.

Now let's go to 100. When you have one tenant out of there. You have- to hedge against inflation, to cash flow, to grow their wealth, right? But they, they're banking on you, the banks, to bring your money in.

The moment you put your money right in the banks, right? That money becomes a liability to them. It I guess what they do with it, they invest it, they lend it out, they do something with it, they generate income with it. All of a sudden they're making 5, 7, -10, 10, 20, 30% on it.

and they give you a nice 0.1% if they if they're being generous. So think about it, if they are doing that, why can't you do that yourself? Why can't you find ways to invest that money? So when I started to discover these things, it blew my mind.

I was like, man, well, I consider myself a smart person, but this is not smart, keeping all of this, you know, trying to save. You cannot save to wealth. Just remember that. You cannot save to wealth.

You can save to a little bit of money. There's maybe some reaches, but you can't save to wealth. You can see the creativity well. So when I discovered all of this and I discovered the wealth creating capacity of real estate.

I discovered that it's a tangible asset on like things like stocks and crypto, which is just standing in the, in either virtual world, or like, you know, in computers. This is something that I actually can touch. I can walk in it. I can open the room.

I could see the toilets. I could see it, it meant so much to me. And then when I realized that it was going to be a possible to actually provide great accommodations for other people. I'm in the service business I serve and all people walk that having quite a bit of pain and limitations in their function.

And just like I'm helping people to walk in my day job, I'm helping people to financially mobilize in my, you know, realistic job. So that for me was, you know, just gave me so much joy. And then when I really, we discovered that a lot of people in our community of health care professionals, a lot of people in our underrepresented, minority communities, just didn't really even have access to this. I mean, I consider myself savvy investment wise, but I didn't know about this.

I didn't know, I didn't buy in a hundred unit building wasn't not in my realm of possibilities. I mean, of what I could do. And so when I was realizing that, man, this is possible, even though I don't have the $20 million to go buy $100 million under unit building, I could through multifamily syndications, pool resources in my communities, and then 60, 80, 100 of us could pull out resources and go buy that same building and take advantage of the wealth creation, wealth generating, cash flowing, advantages, tax advantage, you know. Benefits of this building.

Oh, it mind. And guess what? Around the same time, I realized that I really was developing, I was born and raised in a lower to middle income country. And I did total drawing replacement in the first place because my grandmother had end stage knee arthritis and couldn't get access to a joint replacement surgeon at that time.

So by the time I was in residency, unfortunately she died. But now I get to replace other people's grandmas, uncles, aunties, father's mother's knees and hips and it gives me so much joy. And particularly when I get to do it in low to middle income countries and help to expand access in those places. And to do that, I discovered that to really be able to engage with that work of expanding access in places that didn't have access to those surgeries and knew that I needed to buy some of my time freedom back and realized there was a great way to do that.

so I mean I could continue to go on about the multiple reasons why it just made absolute sense, but, I mean, don't get me wrong. I still love doing what I do and I will probably continue to do it for a long time. I love the institution that I'm currently at because they give me a great platform to do this work and engage with it fully in a way that is very meaningful, and they also support a lot of the work that I'm doing internationally, which means a whole lot to me. I don't want to stop working.

You know, a lot of people do real estate to stop what they're doing. I love it too much. The operating room is my happy place. I don't want to stop.

But I certainly want the freedom to be able to maybe do a little more of some of the international work I'm doing. I would I love to have the autonomy to take my family wherever I need to take them and wherever time I want to take them, you know, for as long as I need to take them without having to worry about, you know, the income that needs to come in and things of that nature. And that's the kind of freedom that real estate can give you. So I'm all in and it's been just an incredible journey so far.

Wow, that was super impactful and very touching just your story and your why I You are not taking that not having access with mobility. And like you said, You're helping people be financially mobile as well, because you're taking that same mission into the real estate side and your best vehicle, and we are very much aligned when it comes to that because you know my whole platform is much aligned when it comes to that because, you know, my whole platform is about helping minorities and underserved communities have access to these types of opportunities. So I'm still working on that. I'm still on the journey, but I'm doing a great job.

Thank you. Thank you. I love to see, you know, people like you, people who look like me, people with the same mission, you know, moving forward because you're leaving that trail to follow. And so I thank you for your service and your work that you've been doing in both realms, the medical field and in real estate, so that's fantastic.

What a syndication is, I got you covered. How to find a good operator. How to even tell if a deal is good or not without having to know how to underwrite it all. about what's under the hood and how it all works.

The link to the guide is in the show notes. Make sure you sign up today. Again, this is a free resource and guide. And if you have any questions at all, please feel free to reach out to me.

Now let's finish up the show. So what we're going to do R now is actually, I'm going to ask you the last couple of questions that I ask every guest. The first one is, Warren Buffett actually said that diversification is protection against ignorance. Now, I.

statement like that. I think what he was just trying to say, at least from my perspective And yes, you could have peripheral other sources of income. I mean, I think the IRS at one point released a publication that says the average million in the US that's about seven sources of income, right? So for me, diversification is having multiple sources of income so that even if one sector is impacted adversely that you were still overall fine.

And for me, the main source of focus for me when it comes to investing is real estate, obviously. Prior of six of the seven sources of income covered. The only one that's left is the products a product focused income stream. And I do believe, actually, to some extent, that almost everybody needs, especially in this digital world, that you kind of need, you know, have some products out there that you are, you know, selling out to the world, because there's great opportunities there.

I just don't have the time or energy to do it at this point, giving everything else that I'm doing. I'm surprised if I tell you that I. got. some story.

I'll probably be a silent partner in it, but don't be surprised. But yeah, I do believe that you I mean, to me, I think you still have to be somewhat diversified. You have to have one main focus where you know, you solely believe in it. You do a deep dive and really understand it.

properly so that regardless. Regardless of the economic conditions and the market conditions, you're going to be fine. Just like now, Even though the interest rates are going up and there's a little bit of angst in the multifamily real estate community, I'm not stressed. We just have to kind of mod, modulate some of our strategies to-fit the current realities, but I know the fundamentals, and I know that if I stay following the fundamentals, I'm going to be okay, and my investors are going to be okay.

So I'm not really stressed at all. Actually, I think there's going to be great opportunities coming up in the next several R on real life and real estate, and I'm just at this point tightening our operations, getting us ready to take advantage of those opportunities when they come. So when you have that level of mastery of your main source of investment, then you could kind of sit back and relax a little bit, but also continue to invest. I mean, I have a small crypto portfolio and I don't know much about it, but I valid cost average the coin and Ethereum and if it works out, great.

If not, great. I don't try to buy the low or, you know, and so, high, I just dollar. average, my stock portfolio, I don't know how to trade on a daily basis., so I have somebody manage that for me. For other sources, like angel investments, I'm investing in actually the founders.

I want people who are greedy, who are adaptable, who have great ideas, who are not just gonna quit at the first sign of trouble, and when you pair those types of founders with a good idea, then the company has a great chance of surviving or doing very well. So that's usually my strategy there.. There are multiple examples, but I think you just have to have one main focus for us to kind of spread your eggs in a few baskets. I like that.

So have the focus on the one that you're actually gonna be active in kind of building up and then kind of passively invest in some other ones that diversify the portfolio. So that's great advice. Second question actually, have you played Monopoly before? Yeah, somewhat peripherally.

Okay, so Baltic Avenue is the cheapest properties, one of the cheapest and Boardwalk is the most expensive. So what is your strategy to win? Which property are you buying first and why? depends on how much funds I have to start.

If I have a lot of funds to start, and then depending on the growth prospects of the expensive property, after significant research, if I'm able to determine that, you know, like there is significant growth prospects, and I have the money to buy on, you know, boardwalk, is it about boardwalk that you said? Yeah, then I buy that. But if I have scraps, and I just need to get started. There's still a lot of wisdom in buying on Baltic Avenue and particularly in areas close to, you know.

Close to boardwalk. Close to boardwalk so that I can start taking advantage of maybe some expansion of boardwalk Avenue. So that would be my strategy. But yeah, I.

So the basic answer is just get in, just get started. Oh yeah, absolutely. And no matter which way you go. Absolutely, because safety doesn't matter.

Even if you fail, you learn so much. So you're only failed by not trying at all. Because I know some of the people in our communities who was were so paralyzed by their over analysis of every possible scenario that could go wrong with any investment, including stocks, including crypto, including real estate. they don't move at all and they just keep their money right in the bank and but you know it's funny they keep their money safe in the bank and the bank is investing it because they were too scared to absolutely and the bank just love them yeah they love them and they also love the feeling they get when it's when they walk into the bank you know the bank manager and it's like bowing down to them you're investing whether you're actually deciding to or not right somebody's investing your money unless you that's a great way to say it absolutely so yeah so the old idea is you gotta get started the journey of a thousand miles starts with one step and that time to take that step is now mic drop boom i don't have sound effects so but in any case so i just want to thank you oh my gosh, this conversation was great.

We talked for a while. This is excellent. Like we could probably go for so much longer too. Oh yeah, we could have kept going for the next two hours.

Yeah, oh my gosh. What is also gonna say, oh, tell people, thank you first of all, again, for coming-, on and sharing all your experience and wisdom and insights with people. And I really hope they took something from this. It would be crazy if they didn't.

But any case, how can people reach out to you if they wanna know more about what X-Sight is doing, if they wanna connect, you know, what's the best way to reach you? Absolutely, yeah, so I'm in, I'm on LinkedIn, Julius Oni, J-U-L-I-U-S, O-N-I, but also you can just email me at rusonee at xicapital.com, that's X-S-I-T-E, capital.com. And my first name is J-U-L-I-U- U-S, O-N-I, it's rusonee at xicapital.com. Check us out at excitecapital.com.

There you can find a lot of information, you know, that can educate you about what we do. And our multifamily real estate could be another way for you to create passive income and grow your wealth. We also, we pride ourselves significantly on the, particularly, the education that we provide. We also have a meetup every first Mondays of the month, the exciting world of multifamily meetup, and it's virtual, so you can join us.

So just follow us on our platforms and join us in the meetups and let's engage in this conversation and continue to grow together. So, thank you. Definitely, and we're gonna have all those links to your contact information, your website, the meetup, all of that we'll have in the show notes so that everybody can just access that easily. So, thank you again, Dr.

Oni, for being with us today. everyone if you have gotten any kind of insights or nuggets from today's episode please give us a rating or review so that this information can be shared with other people actually share it with your friends and family this something they need to hear, you know, we're trying So, share information share the wealth is about sharing information of how to build wealth that we don't normally have access to because we're living in our own worlds every world is just is different you couldn't be so easily separated from the information it could be sitting right next to you don't know that it's there and it exists. So, I love your platforms about education so. So thank you two for bringing that.

Nicole this was a great conversation, thanks so much for creating this type of platform, to educate folks and I just can't say thank you enough for the opportunity to speak on your platform. Thank you. Thank you. Thank you.

Appreciate that. All right, everyone. So that is a wrap and we will see you next time. Awesome.

Did you love this episode of Share by today's guest. Make sure you not only put them in your bag, but if you know of someone who a would benefit from this information, don R keep it to yourself. Share the wealth, and make sure to leave us the rating and review. We'll see you for next week's episode.

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And guess what? That deal that we bought for $25 million in 20 months, 20 to 21 months, we sold that deal for $17.8 million. We made over $5 million in that deal in less than two years. You are an engineer.

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This is Engineers That Invest, and now your host, Mday Kimbang. What is going on, people? Welcome to another episode of Engineers That Invest. Rn today's episode is epic.

We have Tenny Tolofari, also known as Tenacious Tenny from XSITE Capital, and crazy story, but I learned about multifamily investing Rn XSITE Capital. Tenny is a the seasoned professional we've been making waves in two different sectors, simultaneously. As a director of acquisitions and co-founder of XSITE Capital Investments, he's willfully managed to grow his real estate portfolio to a staggering one hundred and sixty million dollars of assets under management within just four years. Yes, you heard that right.

$168 million. But real estate isn't the only field where Tenny excels. He's also a global cyber security professional. And I've provided his expertise to renowned companies like Boeing and Deloitte.

And prior to forming Exact Tenny was one of those guys who sold life insurance as well, you know. And this episode, we're going to delve into Tenny's journey, how he has been build a real estate portfolio of $168 million while having a full-time job over four years. We'll learn by his first steps in real estate and his vision for RCS, So sit back, relax, and prepare to be, inspired by T also known as Tenacious Tney. As we start up, if you can give us a little background about yourself.

I was back in Nigeria, and then I came to the U.S. for grad school. I studied, I- R, I studied cybersecurity Basically, I started, I that's how I about. about real estate,.

. the wife insurance and then the wife was like, oh, I'm not the person that's is in charge of our finances. I want to talk to my husband. So she gave me her husband's number.

We coordinated and I went to his home to sell him. I- to me.. . Okay.

I'm. I got for the family. I got for myself, for my. For my family.

Again, it's just one of those arsenal that you have as part of your, as part of You cannot And then a lot of us, we You have a team, right, where you can afford not to be there for us to walk together, to do something in real-estate. so right now are you investing in real estate time, do you also still work within cyber security, do you still do insurance, what are you doing currently? Yes, I have to let the insurance go because I have to focus on XSITE Capital because I cannot serve everything and so I was like you know what between insurance and XSITE Capital, what should I do? Insurance taught me a lot to give me a lot of exposure, give me my partner, my business, but the real estate is where the future is.

I knew that I could create more a impact with the real estate. So I'm doing real estate right now, and then I still have my full time nine-time nine to five job as well. Did you have any initial hesitations, a were be where you and the future, so that's one of the R, so that's one of that process as well, of course growing our own world as well. So now, tell me more about that clear-vision of a who you a want to serve, and what is your current portfolio?

What have you been able to do as of date? Absolutely. So it's pretty simple. It's busy professionals that don't have the time to benefit from real estate.

Now, what you think about real estate is a sexy word everybody want to get involved with real estate, but not have the time, energy, and strength to- to deal. So who are we target are busy professionals, speed IT professionals, medical professionals that don, don't have the bt time to go out there, look for the deal, put. Together manage it run it and then make money in the process. A.

A all the benefit of real be the tax benefit, the depreciation benefit, the cash flow, the appreciation, and they don't have to do anything other than doing due diligence for who the custodian of the money is, which is like a c. And then waits to get the mailbox. and of course you asked about what we've been able to do in the last four years, we've been able to acquire about $168 million asset on our management our a community of investors. I know, there are some of Oh, we'd like to know, number one, how are you able to manage these?

And also, what is your long term goal? R. Yeah, so my long term goal is pretty simple to be able to do XSITE Capital full-time and a lot of people s to do in our full-time job. Me and my two other partners, again, Dr.

Oni, an orthopedic surgeon, Leslya, I was on his and us and aesthetics, and I'm an IT professional that I've been doing this for over a decade. We make really good income for ourselves and family. And we have a long term vision for XSITE Capital. So when we started generating income as a company, what we did number one was to help us build the company and take us to the next level.

are holding different aspects of the business. And we are, actively engaged with the business as well and providing value and a building a business and investing. And the beautiful thing that XSITE Capital has helped me done is it has helped me now be able to think about leadership, training people, managing people, right? Which is the business building and each of these opportunities that we're investing alongside of our investors, we invest as well.

So I'm a not just only building a business, I'm investing, getting cash. Getting outside of side and building a business. So I'm now getting in the blend of the B and I, And that's where you get financial. And then, you'll be able to not be anywhere in the wall and do whatever you want to do, to whoever you want to do it.

So, now within these four years, can you share about a moment, when you made that first real estate investment link? How did it feel stepping in to this new arena? Yeah, so my first investment was in 2019. Actually, I invested, as a limited partner.

Basically what happened, we had an opportunity. I don't know, if your audience understands, the dynamics of how it works. We have limited partners, and we have partners and lead sponsors. When we get given to the business, we had no clue about commercial, multif.

Family real estate investments, like no idea at all. I've never done it before. I don't have an experience in real estate. My dad was.

I was not a real estate investor. My mommy and I don't have no mentor, no cousin, no brother. So no affiliation to real estate investment at all. But in reading a personal development, I knew that's one asset class that you can use to grow wealth.

So one of the first thing that we did was to learn and the kid ourselves about the business. So we understood that it was an LP part where you can put your money to work and then you get returns. So me and Leslie at the time, we had an opportunity to come in as GP, we couldn't raise the capital to be a part of the GP and be a part of the active role. in the day-to-day operations of the real estate investment as well, and that's when we took it to Dr.

Oni. Dr. Oni came on board, and then we raised that capital, and we became a GP on that deal. And this was in 2020, during the height of the pandemic.

Now, after that, the next year, 2021, that's when we sponsor. What does that mean? We're able to source the deal, put it together, run it, bring your space that you can just call and say, Listen, I have this deal, and come and give me $50,000. No, it doesn't work like that.

Because enough for people to invest with you, they have to know, like and trust you. And. Now some people in your community already know you the other like you. But now do they trust you as a custodian for their money?

Do they know if you've been doing real estate, investment for that's five, 10 years. Do you have the experience doing it? That is where we had a first failure because me and less than at the time we did not have any experience at all whatsoever doing large commercial-realistic investment. So when we were going to people to ask them to come and invest with us, they were not sure if that was the best thing for them to do.

So we have to prove to them over time that we know what we're doing, we are aligned with the right partners in order for we to be able to successfully work with them to biz capital. Now with that, I think it's interesting, I feel like it's a chicken and egg type situation s where, okay, you need to have experience to build that trust, but how do you get the experience that you need in order to build the trust? So you borrow the experience, and that's where mentorship come into play. You borrow the experience by aligning yourself with people that have a track record of doing it because you don't have to actually, have 100% of that have done it, and it's still doing it, and it's willing to teach them.

They're trying to do it by themselves. Specifically commercial, multi-family real estate, or any commercial real estate investment in general, it's really difficult for you to do it by yourself. It's a complete team sport. Be it from a internal team, all the way out to the property managers, the brokers, the lenders, a whole team sport in order for you to get a deal done.

So then with that, who or what provided you with the critical knowledge and resources that helped you make, take that first step? Oh yeah, a lot of people. So we enrolled in several mentorship programs. We had a mentor that have done it, do it.

They give our first shot to come in at school GP. We failed. They give us a second shot to come in, as GP. We passed on that one.

We leaned done him, and we bought our first deal. He helped us on the right to deal, looked at it, make sure everything is good, helped us, it connect us with like lenders at all, they really helped us in our journey towards being able to buy our first deal. And they continue to be our mentors still today. Had a fire, wow, on your first day.

I guess it builds wings. And the question that happened when we had that fire was, do we want to communicate to our investors and say, hey, we have a fire, we just bought the deal two weeks ago, $12.55 million, and now we have a fire on the property. we want to just hide it and don't tell anybody. But to solve that problem, a lot of times when we were beating our company, one of the, we came a with our core values.

So we listed our core values down and what that helped us do is helps us with decision making. Because if we want to make a decision and we look at our core value and it's against our core value, we immediately threw away that decision and go to one that walk towards our core value. - Yeah. And one of our core values is integrity, right?

Honesty and integrity, so when that situation happened, happen a lot of syndicators will want to be like. You know, what is just a fire? We're just going to go ahead and fire the insurance. We don't need to let the investor know, man.

It's too risky We just bought the deal no need to tell anybody about it and let's just close it up But once we reflected our core valley, which is honestly integrity, we're going to communicate with these investors and let them know what we did so when we did that that opened up a huge amount of trust in our community of investors They're like, wow, you seriously, you guys seriously sent us information. So we sent them information about how it happened. . Got a report.

Nobody was injured. We filed an insurance claim on it. We got funds back, we renovated it. And guess what?

That deal that we bought for $2.55 million in 20 months, 20 to 21 months, we sold that deal for $17.8 million, made over $5 million in that deal in less than two years. And those investors, now they've got coming to another deal with us, and again, the rest is just story. Wow. .

Okay. And I would say, hey, I'd love to know about one of your most challenging situations that you've had to deal with when since you began investing in real estate. But I. Don't know.

It might be R that fire. Unless there's something bigger than that. Oh, yeah. Yeah.

I think we've had a lot of different challenges. You continue to grow, you face different type of challenge, but again, if you want me to tell you the challenge I had when we started in the middle, and now, I can tell you, it's just different types of challenge at different times. Give us one of the challenges when you first started, I think when it comes trust, people don't believe in me, let's just pack up the shop and let's move on. But when we had that disappointment where I reached out, I remember we reached out to our mentor, and he said, we should buy this book called The Miracle Equation.

And he bought the book, read the book, and the philosopher. And that book is basically saying that when you have faith and you put action. like I put this, all that work into to it, you're going to get a result. So we believe in what we're doing.

We believe multi-family. We'll be invested in. in multifamily,. We'll be invested in multi-family.

We'll put our money where our mouth is. We'll be invested in mentorship. We'll be invested in coaching. We'll be invested in all of these things, right?

So we're like, you know what? They just keep working hard. And that's how we got our breakthrough because we didn't give up. So our first one is basically we were able.

We were able to risk capital. People disappointed us, people that say they got us, they disappointed us. R and they will realize that we cannot keep our mouth shut if we're trying to do this business. So we started talking about And then the most recent failure we had was closing our last deal where everything wasn't working the way it should, be it with the lenders.

Usually, if you're buying a big deal like that, you have a lenders call every week to discuss about the progress of it. And that deal we did not have one call. That's one. There was a lot of terminology that was going about our group and who we are.

and if we're crowdfunding or if we're not crowdfunding, and we'll do all of those things with delaying our transaction. And also on the day of closing, the term that we a agreed on, they changed on it, which was delaying the close. This was December 30th of 2021. No, 2022, because we're about to come into 2023.

So December 30th of 2022, which if we don't close that Friday, it was done until the next year. The seller really wanted to sell in that day. So we have to do a lot of things to make that close happen that day. But yeah, that was one of the most stressful day of my life, but we made we, we've got it the deal is doing pretty good right now.

Okay. I Throughout your journey, what's what we can possibly than ever before because I learned, failed, continued to fail and continued to have some kind of success. And as I'm continuing to do that, I'm continuing to grow as an individual. So who I'm becoming is one of my most honorable accomplishments so far.

And of course, the people I've met, my partners, these are people that you dream of and then they became a reality, like and of course that I believe that was going to be the company where I have team members that believe in the vision that I, one of the founders have, that believe in it and continue to support it. So, that is just a great accomplishment that I have. And of course, my Have you gained from that that you would like to share with our listeners who are looking to make a similar career path and make that change? Yeah, I would.

you just say. If you dream it, you can do it. If you dream it, you can conceive it, you can achieve it. The reason why you have that thoughts in your head, is because somebody is putting it in.

in your head, not an individual. But it's something that's coming to you I need to take action towards it. Now, would you know how to do it right away? Hell no.

If somebody told me the last four years I put the why right want to do it and put that dream up there and then the people are going to show up somehow becauseolkien guess what you're going to start going to the places where the people you're looking for are you're going to start networking you're going to start having conversation you're going to start reading you're going to start doing everything that will put you in a position to meet the people that will help you get to where you want to get to all give you the resource. Yeah, I definitely agree with that because I first found commercial real estate about three years ago, I believe. That's when I was first knew about what that was with On The Family. And for me, I was like, oh yeah, you need to be a millionaire, a billionaire to really be able to handle these things.

I heard about it and I just put it on the back burner and I was like, who knows? Maybe in 10 years, once my ankle will multiply, so I started more with single-family homes. I would live there, move out, and that was going well, did that twice. And then I, as I began to really grow my mind and learn more and expose myself to other people, then understood that, hey, I was putting limiting beliefs on myself and understand.

There's so much more that I can do, especially with joining mastermind groups, joining mentors. When you have people who are like-minded around you, it helps out a lot. For me, I joined this group Action Academy. That really helped me out with my mindset.

That's awesome, man. That's pretty awesome. The most important part is whatever you want to do, you just got to find people that have done it and then align yourself with them and they'll probably, they'll guide you. Sometimes you've shrieked, sometimes you pay for it, but it's going to be money well spent.

And so what exactly is your role on the aXight team? What sauce do you bring, man? Oh, I'm the director of acquisition. Basically what I do.

I go look for the deal I bring to the team. It's as simple as that. So I build a relationship with the folks that have the deals, get the deals to the team, we write it, that's what we need to offer, work with the team until we close the deal and then I hand off. r what markets are you focused in?

how do you, for the exciting specifically, how do you guys decide whether the deal works? Like what's your buy box? Oh yeah, so we buy in the Southeast. Part of the US, North Carolina, South Carolina, Georgia.

We're looking for deals that have. Of great fundamentals in. In a location that has growing population that have jobs. We're looking at areas that have decent schools.

A crime is reduced, and then we're looking for 100 plus unit. Of course, when we want to buy a deal, we want to make sure the deal meets our investment criteria in the sense of the returns to our investors, because the people we serve are investors, right? So if we're saying cash flow for our investors, call cash on cash is 7%, we want to make sure the deal a hits that 7%. Right now our range is between 4% to 7%.

The average on our return, we want to make sure it heats the particular metrics, which is between 17% and 20% average on our return. When the deal that we exited, we gave our investors almost 30% average on our return. But again, you got to meet average cash on cash, our lives return, and of course, the whole period, when it comes to how long the deal will want to hold, usually hold between three to seven years. When you're mentioning your cash on cash return, can you explain specifically what.

Exactly that means? Because I know some people may not know what that is. Yeah, it's pretty simple way you invest money. And I think the reason why people invest in real estate is for cash flow.

That cash on cash is cash flow that you get on a yearly basis. For example, you put an order grant and you say cash flow is cash and cash is 7 7%. I mean each year you're going to be get to 7. percent of your cash flow of cash flow on your investments, a right?

And then the average, I'm not return is rit R, how much- Okay. Got it. Got it. There's a question Yeah.

improving, You see what I'm saying? And the work that's required to do all of this is not like flip. Where you're going and you're going to get all these contractors and you You're going to do all of this, but you have a professional property management company that you're paying, that will be responsible for managing all the projects on the property. So when we're doing this as investors, not managers.

There's a huge difference between an investor and a manager. and you're doing flips as your manager. You're trying to run this project and make sure it works and then you make some money. We as investors will buy the deal.

What we do is track our KPIs every week to make sure our investors and our properties are doing what we project for it to do. And if it's not doing it, we try to figure out why and then we'll fix it. So we're solving problems. So we're serving problems from the property itself perspective, from the tenants perspective, and from our investors perspective.

So those are the people we serve when we get a deal. So it's a complete different bargain from a regular fee, but I hope that helps us answer that question. All right. So from to the person that asked me that question, I'll make sure to send them this episode because you just hit it right on the knot.

Yeah. Okay, so yeah, so now we're going to go into the last part of our interview which we call the rapid blueprint. So we ask these five questions to every single guest. And first, what is one book every engineer turned investor should read?

The one I really turn my mind about investment of investment philosophy is the one I mentioned by Robert K. Isaki, The Cash Flow Quadrant. That's a really good book for anybody that have a W-2 that wants to go into investment and why. That's a good book.

It is another book, The Compounding Feds. That talks about productivity by Darren Hardy. That's a pretty good book as well. What else?

R, yeah, there's two. There's two good books out. Another one is The One Thing. The One Thing is a pretty good book because a lot of times we wanna do, I think it's Gary Keller, that wrote The One Thing.

We want to do something like, for example, I'm doing multi-family right now, am I getting tempted? Actually, I got tempted at one point to start doing Airbnb, to start doing other stuff. But we. million dollars or a penny that doubles every day for a year I think it was a year or something like that.

30 days and it is. 30 days. Yeah. And just that ended up being compounding to be much more.

It's really just that day by day. Just putting it in more effort every day. Yep. And what do people misunderstand about you most?

What people would misunderstand about me the most, that's a good question. Oh, my age, they think I'm younger than I am, well, I'm a little older, so my age. But I think the age that it gives me will usually give to me, so I think that. Hey, man has the baby face.

Okay. What's one piece of advice that you'd give to engineers who are hesitant to make that leap, into real estate investing? The thing is the advice is you just understand what the hesitation is. If you understand what the hesitation is and then you can solve it.

So is it hesitation money? Is it fear? If. But whatever you're trying to do somebody has done before just find somebody I've done it align with them they don't teach you and they move on to the next level.

Now, where do you see your real estate investment journey with XSITE Capital taking you in the next five to ten Oh, we're trying to hit the $5 billion in management by R2027. So you will hit $5-billion in assets in R2031, R2031, okay. R2031. Because we set that goal in R2021, so 10 years, yeah, $5 billion in R2031, I get that.

Okay, you heard it here first, I will, so that's in eight years, I'll be following up and. athlete in just three steps. can you outline a simple blueprint. It's like, with these such, I get a blueprint on b a how to do it and then just start working.

There's no way to Now do you want to do it yourself? That's one question for you to answer. Do you want to find partner? For me, I cannot, I would not have H I look for Leslie, Julius, and myself, who three of us are doing it and now we have a team.

Prior to millions in terms of assets under management is very inspiring. And I can't wait to see you get to that billion point. Yeah, we will. I us just a 301-265-2056.

Text s wealth to that number. Again that number is 301-265- you want the text s wealth to that number and then you can reach out to us with some information about what we're doing and also my company xasn xylophone, sasn samwell, I as in Indigo, T as in Tango, E as in Edward, capital.com. Okay, well yeah, I will definitely make sure to also have this number and website. in the show notes as well so our guests can reach out, but yeah, thanks again to Tenacious Tenny for coming on to the Engineers that Invest podcast.

Thank you. I appreciate the question. These were very good questions. Hopefully I have my own podcast so I can invite you to come and share your story as a whole.

All right. Thank you. You've been listening to engineers that that invest If you're an engineer to like rate and review. And we'll.

Be back soon. But in the meantime

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See website for details. When we get to those levels, we need to like start figuring out ways to start generating significant passive income. Income that actually is made when you're sleeping, brushing your teeth on vacation, wherever you are. that income is still being made and it's not the same thing as being self-employed because yes, if you're self-, you're still a little better than those people that are employed- but guess what?

You still trading your house for dollars, too. You know, working at that particular job. Welcome to the Share the Wealth show, where minority professionals can learn to escape the racial wealth gap and catapult themselves into abundance. Your host, Nicole Pendergrass, grew her net worth from being negative to multiple six figures.

Join her on her investigative mission to expose secret strategies of the wealthy so we can all have the tools needed to build the life and legacy we were created to possess. Now it's time for the show. Hey everyone, welcome back for another episode of the Share the Wealth show. This is the show where we discuss strategies on how to grow, build, and protect minority wealth.

And today we're gonna to do, something a little different. We actually have a ton of great episodes in the show. I had the pleasure of talking to so many phenomenal people And I want their information and the strategies, and tips, and mindset that they have to be shared with the world. I wanted to be buried in the past.

So today is Flashback the Friday edition and I hope you enjoy the message from one of our previous guests because it s really so impactful and you need to take a We'll see you next time for our regularly scheduled episodes, but stay tuned for today. is like how he got started. He actually is an orth surgeon and his past to becoming an orthopedic surgeon was really based on wanting to help, his grandmother, which he ultimately I won b I'm not even going to give too much detail. I need you guys to listen to this whole episode because it's really good and he really.

gives a lot of information and mindset and thought just in his journey that he's gone through and all the years he spent going through school and education to become a doctor and then how that transitioned b into real estate and why he even looked at real estate at all. And he actually had a stint as an I like your. Oh, been doing, Julius started as CEO and co-founder of XSITE Capital Investment LLC and that is his synd syndication real estate company. They has three partners and s and they all have the mission why we had so much a, talk about, during this who's involved with his company R- educational resources on his website and you would be very remiss to not take advantage of that.

But in any case, here we go. Hi, everyone. Welcome, back to another a episode of the Share the Wealth Show. This is the show where we talk about strategies to grow, maintain and develop minority wealth.

And today we have with us Dr. Julius Oni, and thank you so much for coming and joining us today. I'm really excited actually to dig into our conversation because I know, about you peripherally, I've seen you as some stuff. We've had some light conversations, but I really wanna dig in more about you, your company, your mission and everything that you've been involved with.

So firstly, thank you for coming. Secondly, I gave a brief overview of your background and kind of what we're gonna talk about earlier, but can you dig in a little bit on what you're doing now and maybe I don't know how far back you wanna go, but from childhood or whatever to like what made you wanna be a doctor and then what made you wanna get into real estate, what was that path like? That's. That's a great one.

Yeah, thank you so much again, Nicole, for the opportunity to speak on your r platform and get into this discussion. I was particularly excited to talk to you because obviously we are aligned in our mission to try to expand the minds of people in our communities and to increase the wealth growing capacity of folks that look like us. And certainly we've all kind of gone through multiple different ways of getting here, but it just warms my heart every time when I see, another minority, professional, expanding the mindset, doing it and play outside of the box. And it warms my heart and I want to commend you 2017 when I made.

where I trained in fellowship to be a specialist on joint replacement surgeon. Since then, I've been in practice. Three of those practice years were in Philadelphia at Einstein Medical Center, I had a clinical appointment at Thomas Jefferson. And I segue from that job into my current position where I have worked at Johns Hopkins as a joint replacement surgeon for the past six years going into seven years now, so it's Windy.

road and that pretty much kind far. Now, if you want to talk a little bit about my investment journey so far, obviously, , prior to becoming an, you know, an orthopedic surgeon a little over nine years ago. Oh, actually, a little over 10 years ago, I didn't do much of an investment. You know, there was, you know, no money to be invested.

But very shortly after becoming an orthopedic surgeon, I actually also didn't invest much either. I think all the delayed gratification R of, you know, spending over 14 years, either, you know, from undergrad to finishing fellowship, you know, 14 years of delayed gratification will make you kind of spend money anyhow, you know, at some point and try to keep up with the Joneses. And, you know, that's but that moment of just going out loud and trying to buy whatever luxury item you can get your hands on, it was relatively short-lived for me because even though it was fun, I quickly realized that I didn't necessarily derive that much pleasure from getting liability if you want to call it that. Listen, I know you've been digging in, studying everything you can, listening to all the podcasts, reading all the books, even going to meet-ups.

You basically have a degree from YouTube University, right? But you still feel stuck. You don't know how to actually implement what you've learned. You're nervous about taking the next step.

So. I've decided to start the micro-family investing accelerator. This is a mentorship program where I personally guide you through my five proprietary pillars. So you can learn how to buy your first commercial multifamily property and scale while not biting off more than you can chew by focusing five to 20 units.

If you're ready to grab 2023 by the Horns, schedule a free discovery call with me today. The link is in the show notes. And now let's get back to the show. And I started investing with my first home that I bought, you know, I bought a residential home at that point in Philadelphia and then thought that I was going to start getting a single family home every single year for the next 30 years, you know, and eventually develop this fantastic single family, portfolio that I'm gonna sell as a portfolio as an alternative to my classic, traditional 401k, you know, investment.

But I quickly realized that I was a poor landlord because I didn't like to-do with toilets, termites or tenants. And it wasn't because tenants are not fantastic people. I was just busy, too busy with my primary day job it was kind of tough to be the primary person responding to those folks. And even when I try to use property managers, it just even further decreased my cash flow significantly because you were still responsible and you still had to kind of actively participate in the decisions if the HVAC machine went out, you still got to pay for it.

You still got to, you know, talk about, you know, all the different options for them. And if the doorknob was broken, then you got a pretty big bill for it, you know, and you have no choice but to pay for it. So quickly I realized that single family wasn't going to be the way to go after I think about after buying my second property. And then that was my year two.

And then around year two, I discovered angel investing. And so I started invest, you know, because my brother actually at a startup, and I invested in a startup. And then from that point on, I discovered demo days and started to invest in different early stage startups, pre-seed, round, and with the expectations the R, 20, a of you R , then the question was, how do. How do you.

you could touch it, people understand it. And how do you stop democratizing access to this? Ask us when I started looking at all the conferences and started actually engaging with it. I didn't see that many healthcare professionals represented in the folks invested in this asset class.

I saw lawyers, I saw business people, I saw engineers. people. I certainly didn't see that many women, you know. So, there were some very clear underrepresented minorities, you know, when it comes to folks that were participating in this incredible wealth generating asset class.

At that point, I realized that there was a great opportunity to take the gospel of multi-family into our communities of healthcare professionals and of underrepresented minorities of immigrants and of you know people that just did not have ready access to this asset and you gave it all a like and I love it because there were so many hidden things within your journey that other people can like glean from. I think one of the biggest things is we talk about high earners and especially when you get into you know doctors and medical professionals and things of that nature we talk about lifestyle creep and we talk about how a lot of times high earners as they start making more money they start spending more money and their expenses become higher. So it creeps up with their income. I just shared an article not too long ago that majority of people who make over 200 or families that make over $250, s a year have a like either I forgot what their net worth or they still live paycheck to paycheck or something crazy where they just didn't have the assets or the net worth to match their income.

But you put it into perfect perspective because you said it took you 14 years of schooling and trouble and delaying your gratification. So it's not that you don't b, you have delayed gratification to get to the I.I. role that you wanted to get to, a, which was that career. But then now, it's like, all right, I delayed gratification long enough.

Now I made the money. Like, now, You know what I mean? So that just makes you appreciate more and not scorn the high earners, you know, that you just spend all their money on keeping up with the Joneses in the big house with fancy car and all that stuff, because you really you get to understand from a person's mindset. Because if I had to delay gratification for 15 years before I did anything.

Cause I'm always working. Even when you make a little bit of money you don't even have time to spend it. Cause you're busy, you know, rotations and whatever else you're doing. Yeah, absolutely.

So that is completely understandable. And I think that will talk, speak to a lot of people's mindsets who have made it.. And they're like maybe the first generation in their family or someone, making a lot of money at a certain career, but now either they're helping their family out who needs help because they're the most successful person. So they're helping people with bills and issues.

Then they're also wanting to live a better lifestyle cause they've been delaying their gratification for so long. But then we kind of stop there. And you have found the key of not just letting it sit there because like you found out with the pandemic, if you stop working, what if you couldn't go back to being a surgeon and you had no more income? And it sucks to say you got to a little bit longer.

But you at least got to put some things in place where you can, like, still enjoy the fruits of your- But then still try to build up for the future. Yeah, absolutely. think you make some amazing points there and I think just to add a little bit to r that before you move on to the next point. The fact is, as high earners, as high income professionals, we are just highly skilled wage workers.

You know, that's it for the most part, you know, especially doing an employee precision, right? Highly paid skill workers is what I meant to say, highly paid skill workers, you know, we have a skill and we get a lot of money for it. But with that responsibility, or with that kind of pay, and especially in an employee situation, comes high taxes, right? So the growth usually looks pretty good.

But that means you like in the highest tax bracket, for the most part, or close to the highest tax bracket. And that means your tax liability going to be much higher. Another thing that really hurts us as highly paid skilled workers, particularly medical professionals, is that we usually also have relatively high loan burdens. So you have a, yeah, you do get paid a good amount, but then R relatively high taxes, because that's a WTO income, they take that those taxes even before you can see anything, And then you have to still pay your loans down because now finally you're making some money and all those loans you've been deferring, you've got to start paying them down.

And on top of that, you had the lifestyle cryptoid, because now everybody's looking at you. You're the orthopedic surgeon, you're the cardiologist, the astroenterologist, anesthesiologist. How come you still driving your Honda Accord from undergrad or medical school, you know? So you want to keep up with the choices.

You want to take a vacation, nice vacation. communication with your family, you know, you want to buy a relatively nice R so that you know you're not embarrassed when people come in to see this doctor house, you know so, and then, you know, you have kids now your kids want to go to like the nice private schools and things like that and it's really starts to head up, so it makes sense the article you're talking about that folks that make 200,000 plus that still, you know, living paycheck to paycheck makes absolute sense to me. What we have to realize is that when we get to those levels, we need to start figuring out ways to start generating significant passive income. Income that actually is made when you're sleeping, eating, brushing your teeth on the vacation, wherever you are, that income is still being made.

And it's not the same thing as being self-employed. Because yes, if a And it's still paying relatively high taxes, but maybe you have a little more wiggle room there to like, you know, offset some of your tax liabilities. But amount you can make is still limited to when you actually physically present or actually actively, you know, working at that particular job. But when you have true passive income, where you just could be slipping, eating, you know, doing whatever you are, and the money is still coming right into the account, that is when you really are starting to create true wealth.

And that's why when you start stepping onto that journey of financial freedom or financial independence. And you know, and I love that. Okay. And we're definitely going to talk about the real estate side and how people can create that passive income, especially with the multifamily real estate in the field that you're in with your company.

But I kind of want to touch a little bit on the angel investing aspect first, because that's so new and so different, like I'm not new and different for us maybe, but I haven't heard that, that's not just open to anybody. Like if you aren't making a certain amount of money, those doors are not going to be open. Rand then that's where, when you're putting seed capital in, by the time it gets to the stock market or IPOs, those angel investors get bulk of that profit. People who are buying stocks, they're getting the scraps left over, honestly.

Yeah, you can make money on stocks. I'm not knocking people's stock portfolio, don't come from you, guys. But the risk is up front, so like you said, it's high risk, high reward. So first I want to say, how do people even get into that world?

And what are the barriers to entry? Like what do you have to have like checked off on a checklist to be able to angel invest? That's a great question. So first to answer your questions, what's the barrier to entry?

I think typically you have to be an accredited investor, which is just meaning as an individual, you make $200,000 per year for the past two years with reasonable expectation of continuing to make that in the next couple of years or $300,000 in income as a couple or a million dollars in network. It's the same thing for multifamily. If you're going to do a private placement, especially a 506C, which we can go into later, you have to be an accredited investor. So it's the same thing.

That's the . With regards to the expertise to actually, I guess, get access to the companies and to know what you're investing in and knowing now to like, you know, assess some and things of that nature, just like anything else, it takes quite a bit of research. For me, it was sudden deputies somewhat that I kind of fell right into it. So after investing in my brother's company, MDev's Global East Company was selected into an incubator called Textars in Austin, Texas.

There's another incubator called White Combinator in Silicon Valley, that also adds a bunch of like this startups that you can evaluate. But there are actually crowdfunding sites also, where you could just like, on this real estate side, you have Crowd Street and Fundrise. This is actually equivalent of that for Angel Investing to where you could put a little bit of money, $1,000, $2,000, $3,000, or whatever, to invest in some of these companies. I am not sure what the names of those companies are, but people can just type in Angel Investing, you know, crowdfunding or something like that, and they should be able to find that on the internet.

I have not done those crowdfunding type in general investments.. Saw my brother go through the process of trying to raise money, proceed or family and friends rounds a seed round. I was kind of able to learn almost alongside of them and slowly but surely I started to identify some companies that I would love to invest in and started to cold call or call the email like founders of those companies and just say, you know what, I've been looking at this for a while, I'm interested and they would present to me and I would invest. And eventually I developed enough of a relationship with some of those founders, you know, when they discover are their friends starting something that they think I would be interested in, they'll pull me in or given my background, if it was like a healthcare related startup, they'll be like, oh, I have one of my investors ask this background who may be able to kind of help you with this company.'s company and then they'll pull me in, I'll review it, you know, and either invest or advise or whatever they need to do.

And through that process, I essentially became involved, not just at the investor level, but on. The advisory board of at least four of those startups that I invested in, but there's multiple ways to access that. But I think the first thing first is to educate yourself about what angel investments are, you know, kind of start maybe with and people could go to the white combinator website, because you could go to the Techstars website, T E C H S T A R as Techstars website, those are two incubators, you know, one in Austin, one in Silicon Valley, and just reading their websites and kind of seeing what a do alone, gives you a nice little idea of how angel investments work and potentially how you can participate because they have what we call demonstration days, demo days where you can literally travel to their places and just sit there and listen to multiple startups present. Wow.

And angel investors all over the country go to these demo days and just listen to different pitches and then decide which ones they want to invest in. Wow. So those incubators, those are not crowdfunding incubators. Those are normal accredited investor level incubators.

Yeah, absolutely. Those are not crowdfunding incubators. These are like great incubators where they. Literally see through thousands and thousands of applicants or founders who have s great ideas and want to explore them.

Then they select which ones they think they want to help build up or develop. And so they now bring those founders together and provide them with the tools to take their companies from one level to the next. Yeah. And by doing so, then present them to, and also essentially bring them-em-in, develop them, and then bring in a bunch of investors onto their platform to invest in those companies.

Okay. Yeah. All right. That's great.

And just for everyone who's listening, if you are not accredited, the crowdfunding websites where you can find out about Angel Investing, those are ways where he was saying you can put in a thousand, 2000, or something like that. Crowdfunding is basically for anyone's income level. So even if you're not accredited, you can play Angel Investing at a small level just to get your feet wet and get started until you become accredited since we're working on that. But in any case, okay, actually that's just, it's just a whole nother world.

You know, like when you get into real estate you're so like, you're surrounded by real estate stuff all the time, you just get used to it. You're just engrossed in that world, but then other people don't really realize what's going on. And that's how I feel like when you are explaining about the incubators and these demo days and everybody's traveling, all these angel investors coming, but that's just like their normal world. And we don't know that's existing, you know, because it's so outside of the realm of what, you know, mass main street investors and anyone else does.

I just think that is something that I would be interested in looking into and just exploring what that world even looks like, but one thing that comes to mind is, do you get a rush kind of the same as gambling with investing as an angel investor? [inaudible]. comes high-reward, right? And you cannot make that type of investing your main source of investing if all you playing with it's relatively small, right?

So I wouldn't recommend that that's all, like someone should use that. It's their main strategy to invest. The vast majority of angel investors have actually accumulated a little bit of cash to invest with and then they use that to invest. So because of the nature of it, investments, right?

Now, one thing I realized quickly over time is that without taking some risks, you cannot really grow wealth, right? And so my strategy to investment is to do relatively lower risk, higher half present or return type investments like real estate combine that with higher risk and then it starts from there and then continuum kind of goes on to then higher risk higher return investments in stable markets or developed markets like the US and others and at the highest level of risk which I also do is investments in emerging markets where obviously, you know, you kind of invest that money and forget about it. But then those actually have the highest return of all. So my investments, you know, goes from the lowest risk, - I guess the lowest risk is really just living your money in your bank account.

But that money is actually losing value a little bit, you know. Yeah, I don't know if that's the lowest risk. They're risking it in other ways. No, I mean, you're definitely risking it because, you know, especially with six to eight percent inflation, that money is losing value on a yearly basis, you know, but you can, I guess, say certificate of deposits, you know, money markets, things like that, they get to see like maybe the kind of little percentage, those bonds or, you know, things of that nature.

And they can do, and I have this little stock portfolio too, that I have a brokerage manager for me, a brokerage account that is managed for me, you know, that's not my main source of investment. So I don't really, I just let them do what they do with it. But real estate is what I, I'm most passionate about is so tangible. I understand it.

Now, over the last two years, where I've seen it work, and I've seen it seen us help others create wealth with it. So for me, it just makes sense, you know, and Oh, to me earlier, you actually could create stable cash flow also with it, you know, unlike some of these other strategies that I just mentioned earlier. Yes, very true. So okay, with that, we're gonna move over into the real estate side of things.

Okay guys, don't kill me, but I'm gonna have to cut this episode short. This is too juicy and we need to do this in a part two. So stay tuned for the next episode that airs and you can hear the rest of our conversation. Did you love this episode of Share the Wealth Show?

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Welcome to the Real Estate Raw show hosted by Joe Mendoza. Guys, I have the real Dr. J today. Okay.

Okay. Check this out. I've got to read his resume because this is extremely incredible, guys. All right.

Julius, the CEO and co-founder of XSITE Capital Investment LLC. Prior to joining XSITE Capital, Julius Investment focused with single-family real estate and angel investing. Over the past several years, Julius has invested in over 50 startups and currently sits on the advisory board of four healthcare related startups. And he is a real doctor, folks.

Dr. Julius Oni is a director at John Hopkins adult hip and knee arthro, arthroplasty. He's an orthopedic surgeon, all right? So guys, this is an amazing show whereas you could learn from him being as busy as he is, zero excuses, all right?

From starting in 2020, in a few short years, 168 million in assets accumulated in his investment company. So if that didn't catch your attention, I'm not sure what will, all right? So let's sit back, take tons of notes, guys. This is an incredible show and watch, listen.

And if you do like what we're sharing here, please smash that-bell, hit the a subscribe button. I had a lot of fun as you could imagine on a show with him. Let's watch. Dr.

Jay in the house, Dr. Julius Oni, how are ya? I'm doing wonderful, thank you. Thanks for the opportunity to come on the platform and chat with you, so thank you.

Yeah, now thank you so much for taking time out of your super busy day. I know you got a lot to do, but I just wanna have you on the show, to hear your story and have the audience kind of listen in and learn a few things, okay? Thank you, it means a lot to me. Thank you.

Awesome. So some of my audience, they don't know you. Let's start with that first. Prior to real estate, actually, we talked a little bit earlier, even now, let's hear that backstory about Dr.

Julia Sony. Absolutely, I mean, it depends on how far back you want to go, but I'll give you the Cliff Snow's version of it. How about that? I said, we have eight hours, so.

So I actually, I'm an immigrant to the US. I was born and raised in Nigeria, and then at age 17 moved to the US for college. I was fortunate, I went to college in upstate New York, was fortunate to do pretty well and got into medical school right after. So I went straight into medical school at Howard University in DC.

And then was fortunate to do fairly well in medical school, and mass into a specialty called orthopedic surgery. For those that don't know, it's the surgery of muscles bones and joints. So in particular, I sub-specialized in enjoying replacements, which is the replacement of hips and knees. And I did that training, that extra year of training for that at Rush in Chicago.

So after that, I segued to Philadelphia and took my first job there for about three years and then moved from there now to where I am currently, which is in Baltimore, where I've been for the past seven years. So I've been in practice for the past 10 years or so, and going into my 11th year now. And yeah, so it's been incredible, but that is my medical life, right? When it comes to my real estate life, that really came into being starting 2015, When I started to buy single family homes, and then very shortly after that decided that a single family wasn't the way to go for me.

Eventually partnered with two other incredible people to start a multifamily real estate private equity firm in 2020 2019 2020. We started in 2019 but then really started buying deals into 2020 early 2020. So in the last point, three plus years, we've been fortunate enough to accumulate about $168 million worth of real estate. And that is only because of the power of community.

And so, yeah, I'm happy to go into as much details as you want about any part of that story, either the real estate part or the multipitic surgery part. but that's the summary. Beautiful. So guys, he just gave me the green light.

So I'm gonna go multiple different directions today and there's multiple different audiences here, including I would say probably. Probably some of those that are right out of high school, starting their college careers that listen, they're getting into real estate. I mean, when I started, I was about 17 years old and I was already having this inkling to get into real estate. And I know running into these boot camps and seminars and training, man, they're 19, 21, 23.

That's amazing. That's amazing. Absolutely. That early.

Yeah. Absolutely. And so you came from another country and you wanted to be a doctor and you did it. What caused that pivot from being a doctor, making, I would assume pretty good income to transitioning into real estate.

What was that pivot? What was that moment? That's a good question. So, I mean, as an orthopedic surgeon, if you know orth, orthopedic surgeons are actually some of the most highly compensated doctors in general.

When you look at the list of most highly paid doctors, orthopedic surgeons consistently end up in the top three, almost always. So yeah, I was making a very handsome salary, but one thing I came to realization of very quickly, in orthopedic surgery is that even though I was being paid very handsomely, . I was still a highly paid skilled worker. That's what I was, you know, and no matter how well compensated I was, if something happened to me and I couldn't work anymore.

The TAF was going to be turned off, right? Even though I have disability insurance and yeah, I would get maybe 60%, 70% of my total salary R but still that is a significant reduction in salary there if something was to happen to me. The that. The other thing that happened was that I thought about was the fact that I couldn't pass the fact that I was an orthopedic surgeon on to my progenies.

I couldn't pass it on to my kids. I have two beautiful daughters and who knows if they want to even become a doctor, who knows if they're interested in, you know, I could train them to be interested, but I can't force them to, and even if I pass all my knowledge and orthopedic surgery onto them, they still have to do the work to really become an orthopedic surgery. So, I mean, it wasn't like an asset that I could pass on to them. A lot of the lessons I'm learning in it, I could pass on to them, but that's not something I could pass on to them.

So, I was looking for assets that I could pass on to them. I was looking for a portfolio of things of value that I could pass on to them. And in my exploration of the different things that I could [inaudible] on the more you make, the more they take.

Yeah, absolutely. You would like, in the highest So, and at one point I used to joke around in my first three years of practice because when I added up my tax liability, he added up to about 51.4% of my total income. And I was like, man, that means that I've actually only just been r lugging for the government until maybe Midday Wednesday. And then it's around Midday Wednesday that I actually start working for myself.

So I think this is a, it's not to take, but I'm thankful for it. That I learned those lessons but quickly realized how to start to take advantage of the opportunities that exists to buy assets, to be in the tax advantage group to where I'm able to achieve rep status with my spouse and then do some incredible things with my tax liability. Beautiful. Well said.

Now, as far as scaling, you started, you said around 2020, which is right when COVID was. Right at the beginning of COVID. Yeah, and then you scaled it to 168 million. How do you do it so fast?

That's incredible. And this is actually probably a good place to talk about the power of community. So one of the main reasons why I was able to do it so fast, and just let me dial back a little bit. So let me take you back to like March of 2020.

All of a sudden, everything shuts down. Right. I'm sitting at home with my wife. We are walking in the woods every day for almost three months.

I can't go back to work. And up until then, I'd been in practice for about seven years, give or take. And my identity was mostly cemented in being an orthopedic surgeon who was finally kind of coming into his own and having a super busy practice. , so I, all of a sudden can do it.

I'm gonna be able to go back. So, and I realized, man, actually up until that time, I'd never spent that much time spending, you know, that much time with my wife and we truly enjoyed it. I really enjoyed it. I also miss being in the operating room.

But then I was like, man, what happens if biz happens again? What happens if we never could go back to the operating room for a long time? You know, there was a lot of uncertainty then. And so I realized that I needed to quickly figure out a way to replace my cashflow so that no matter what happens in the world, now or in the future, that we will be set.

At least our expenses will be taken care of, right? So that really got me thinking. a co-founder and our director of operations at XSITE Capital had been talking to me about multi-family prior to them. So I called them back and he and my third part and my second partner, Mr.

Tenny Tolofari, who is also our director of acquisitions, had already started the company at that point and they had been talking to me. I was not really interested because I didn't really understand what multifamily was. But then I started reading a little more about it around that time when I was home. I was listening to a lot of podcasts.

I was reading a lot of books. We will borrow profits, the ABC of real estate. And my mind was just completely blown out the information I was finding. I listened bigger pockets podcast, all of this podcast, you know, I was listening Best Ever by Joe Fiales.

I was just, I just goes deep into this world and I was like, listen, we got to do this. And so, I called the month and the rest is history. We ended up coming together and starting the company. And four months later, we co-co-general partnered with another group that had been doing it prior to us.

And once we were able to do that, we were able to actually watch what happens behind the curtains, what happened on the asset management calls, what kind of team you had to put together to acquire these properties. Yes, all we did was just a little bit of capital raising for that a particular deal and a little bit of asset management with the lead sponsor. But we learned fast because everything was still kind of slow with our with the medical practice. We were still slowly ramping up so we just learned as much as we could.

Eight months later we would lead sponsors on our next deal which was a 132 unit acquisition in Columbia, South Carolina. You know, we learned so fast that we knew exactly what our target market was. One of my partners was so tenacious, we call him Tenacious Tenny, it moved this entire family to our target market. It sold us home in DC.

I mean, it was literally an exercise in faith. We just believed so much in each other that we were like, we're just gonna go. And it sold us home in DC, moved this entire family to South Charlotte, North Carolina, and started pounding the pavement with the brokers. So you ask about how we were able to do this quickly, that was probably the first step, that step out in faith.

And then our first deal as lead sponsors was that deal we got eight months later after our deal that we did as a co-general partner. And the way it got that deal was it drove three hours to go meet a broker, had a 10 minute meeting and then drove right back three hours. And so the broker, thought maybe it was just around and called them later and realized that he only just drove for the meeting. And it was like, you guys must be really serious if you're going to do that.

So it's like, I'll give you one deal. Cause I mean, we had no track record. We only had Co-General Partner on the deal, but I'll give you one deal. But if you screw up on it, that's it.

No more chances for you. But if you do well, then we're off to the races together. And guess what? We said, it did exactly what we said we were gonna do.

We closed that deal just on the same day we told them we raised $5.3 million for that deal. Wow. And I mean, we did everything in our power to make sure that we crossed all our T's dot our highs, learned a ton of experiences on that particular deal. And guess what?

That's the first deal that actually we've done cycle on. We ended up selling that deal. We bought it for 12.5, we sold it for 17.8 mil, 21 months later, where for 30% average annual returns by investors. So, I mean, it was just an incredible experience, as lead sponsors.

How do you pick them up? That's a great question. One of them, Leslie Awasom, we actually worked in the same hospital. It was certified registered nursing and necessary.

So it would put the patients to sleep out to operate on them. So after we were done with surgeries, we would just talk a little business. I'll tell them a little bit about some of the angel investing and some of the single family homes I'm buying. They'll tell me about all these learning about all the things he's learning about multifamily real estate.

At that point, he also was doing, he had just also bought like a condo that it renovated and was gonna do the birth strategy on. So we would just talk about all of these different things and we developed a really nice friendship from that. And through him, I met my other partner who was his friend and they had started the multi-family with the company together, they started XSITE Capital together. I was the third partner to join, but eventually they voted me as the CEO.

And I reluctantly took the job, but I'm really thankful to them for essentially pushing me out of my comfort zone. Cause they put me in that place of a discomfort, because I usually like to stay private and not necessarily put myself out there, from that step alone, the fact that it pushed me out up front, that has forced me to grow incredibly, because it's in that space of discomfort. When you step out of the comfort zone, that's when you grow the fastest. Since then, I've been pushing the boundaries even more and just trying to grow even more and step out and confront all my fears as much as possible.

It's been an incredible three years of growth. Wow, that's super exciting. As far as like the team now let's kind of pick it apart a little bit more. Usually there's somebody who's really great at raising capital somebody who's really good great at project management somebody who's great at networking and what have you.

You guys all kind of divide and conquer or you guys kind of cross train overlap together. Oh no, we've divided and conquered. Tenny Tolofari, the partner that I said moved his family to the southeast U.S., is essentially like the fearless of the three of us. He can walk into any room and get the numbers of everybody in that room within an hour and then like by the end of the night is It's the life of the party, as always.

But ..., you. But then, you know, there are some things that he also kind of asked some reservations about, right? So he was the one who we sent out to essentially get all the, to go see the brokers, to go talk to the brokers because we knew it was gonna do a great job, just, you know, breaking down all the barriers. Oh, and the other thing about him, It doesn't take no for an answer.

It's just manages all our underwriting. We have an underwriting specialist now who is actually his brother, who learned right on the platform and it's just becoming a genius at this point. But initially was Leslie R. doing almost all of our underwriting because he pays so much attention to every detail.

He also does almost all of our asset management now. So he's done all the asset management calls when sometimes we all cross cover each other, but for the most part, it takes just the one that does not miss any detail. And I'm somewhere in between the two of them. I could fill in wherever you need it still, but I focused mostly, in the beginning, on just investor relations, because I had built up a lot of goodwill over the years with a lot of people in my field.

And, you know, people knew me as someone those of great character. And I didn't actually realize how much that meant until I started asking people to come invest with us. There were people I had not spoken to in 10 years. And they would tell me, listen, I don't know anything about what you're telling me, but I remember you from back then.

And I remembered you as someone who was so trustworthy and full of integrity. I don't know enough about it, but take my $50,000, see what you can do with it. And if something comes of it, great. If not, it is what it is, you know?

And I was just so humbled by that. And just enough people believed in us and was willing to do that until we were able to actually have a track record. Now everybody kind of tells their friends and it's a self-fulfilling prophecy in that sense. But it's, initially I was the one who went out there and just talk to, you know, so a vast majority of our investors are actually doctors or health care professionals.

So Leslie also spoke to his CRNA community. And so I would say 80% of them are either doctors or CRNAs. And then everybody else comes from other, you know, we have lawyers, we have accountants, we have everybody, you know, everybody else, but those were like the core advocates that we went after. a pretty powerful database.

That's awesome. Now, at any level of business, a lot of people that when they're growing and scaling, they have some growing pains, then or now, what have you been experiencing around growing pains? How could you help the audience understand as you start to scale, get more and more doors, grow the team, what kind of things can you share about that with the audience. Oh man, how much time do you have?

We're down to seven hours now I think. We had too many growing parents going through this. I mean everything from knowing exactly what type of banks to work with, knowing exactly how to manage those relationships, knowing exactly how to figure out, you know, how to respond quickly to issues that come up invariably in a lot of these properties. For example, that first property I told you about that we bought for 12.5 million, one month after getting it, we had a fire.

And I mean, we were still celebrating the fact that we just bought this property. We went for the what do you call it, the broker's dinner. Every time you close the property, you know, the brokers would invite you for a nice little dinner, you know, everybody celebrates. It was right up when we were driving away from the brokers.

We got a call that oh, well, the apartments is completely burned down and they were able to contain it from be extended to the other apartments. But we quickly responded, we went right there. We put that tenant in a hotel to make sure that he, that tenant and their family members were okay. We were just thankful there was no loss of life.

And yeah, we went through the insurance claim process and we ended up getting quite a bit of that we're even able to replace that entire apartment and renovate some more with the money from that. Yeah, and then there was one time we had a gunshot event right in the property, you know, and once again we had to evict those this that the actually was by a guest of one of the tenants. And so yeah, so we had to evict the tenant that was friends with the person who caused that. So, I mean, there were things like that.

And when it comes to the operation of the company, I mean, there were there's a lot of growing pains, like what investor relations platform should we use? You know, we went through a couple of those and they were just terrible and just so glitchy. And, you know, once an investor is trying to invest in and trying to sign and your platform does not even work well, that does not build well for that investment. Quickly, once something goes wrong in that process of investing either when they're trying to sign documents or something and it does not go as smooth, they are more reluctant to actually wire you the money.

So you have to make sure that process is, I mean, you have to over deliver for them over their price. So when we had that crappy system or platform, what we would have to do is actually go on Zoom with the investor every single time and actually walk them through it. Wow. So that even if there was like something that was going to stop them from moving forward, we could deal with it in real R time.

. That was our way of over-delivering for them, you know? And that really gave them the confidence that we cared. And they understood us as professionals.

Professionals just like them will understand how hard it was to earn this funds that they're about to invest. And so I think that also helps in the sense that we understand their pain. We've been there and we've done that. And we are just trying to provide a platform for us to co-invest or to be on this property ownership groups together.

So I think that resonates with them and now to their friends and family that they're bringing on to our deals. Nice. Now, I tell a lot of people throughout the country and sometimes I hear this excuse or limiting belief. I'd imagine as a doctor, you have a lot of time to invest, right?

They did, I'm kidding. You have little time to do what you need to do. Give us like a typical day, like this much in being a doctor, this much in the real estate, research, networking, what's a typical day and how do we overcome this excuse for the audience? That is a great question.

So that was actually one of my limiting beliefs too at the and I mean, in the beginning, one of my limited beliefs was that the fact that my identity once again was completely cemented in the fact that I was an orthopedic surgeon. So I was like, wait, are people still gonna take me seriously as a diabetic surgeon if they hear that I'm invested in real estate? Are they still going to think I'm serious as a researcher, as an academic surgeon? Are they gonna think I'm being distracted, you know?

Because as doctors, we are taught very clearly to be pretty tunnel vision. And I think there's some positive to that because when you just have one focus and you have nothing else that you're thinking about, you become an expert at it. But then you get to a point where you actually are a pretty good expert at what you I do. I think at about three to five years of been in practice that happens where you are very comfortable in who you are.

You're always learning and you continue to learn forever but you kind of, you settle into it, right? And that's the point I think of diminishing returns where now people just feel like, oh, for the rest of my career, I cannot focus on anything else. I have to outsource my financial life. I have to outsource in my investing life.

I have to, you know, so the retirement is gonna be the 401k, the financial life is the financial advisor, you know, if I have any properties, the property manager and you just don't allow yourself to expand outside of that, right? So that was one of my issues And it took a lot of coaching, right? Working with coaches, working with my partners who really helped me get over some of those limiting beliefs. But to specifically answer your question, walking through a day, for the most part, my days are pretty long, especially in my operative days.

And I do real life state almost exclusively at night and weekends. Like, that's all I got to do it, you know? But, I mean, most people work from nine to five. I'm usually up by five, you know?

I'm in the hospital on my operative days by 6.30 a. m. I'm operating almost straight till. I'm 6 p.m.

at night sometimes, most times. And then from that point on, once I get home, probably seven, eight, then I start, you know, doing my calls for real estate. And then I do that to about 10 and then go to sleep and do it again the next day and then a weekend stay. I mean, if we are in raise.

I mean, in the early days before now, we have an investor relations associate that keeps the investors warm and things like that. But back in the day when it was just me, it was the investors relations department. I mean, I remember coming up with a list of 500 names from my phone that people will potentially go forward to invest $50,000 in JPM. And it didn't matter if the last time I saw you was 15 years ago or two days ago.

I was calling everyone and those days will be 12 hour days of just calling people and just talking about the joys of real estate. Nice, and I mean, most people, and some of them, even listen to hear this and they would know who they are. They thought I was crazy. They were like, hey, are you, wait, is orthopedic surgery treating you okay?

Why are you trying to do this? You already make enough money, you know? I'm like, this has nothing to do with money. This has everything to do with giving you and I the option to actually do what we do just for the fun of it.

And have a lifestyle. And a lifestyle and our financial freedom and be able to do what we wanna do we want to do it with whoever we want to do it we'll do it with for as long as we want to do it, you know, you don't have to be like locked in, then into one thing and just be complete just, you know, be trying to get the next carrot, you know, like this, that's fine at all if that's your passion, but look, I've never heard anyone say, ah, it would really be bad to be able to take a month off just to travel the world with my family. Exactly. No one would say no to that.

But in most people's jobs, they can't afford to do that. You know, so I got fired. They have a private practice, they wouldn't be able to make it work financially. So well, I'm telling you how you can potentially do that, because the journey of a thousand miles sticks to the first step and just starting and starting with the next deal and starting and diversifying.

Yes, have your stock portfolio, but yes, also have your real estate portfolio. Yes, have your crypto portfolio, but yes, still have your real estate portfolio too because this is this a reason why a vast majority of wealthy people either make their money or owe their money in real estate. There's a reason why life insurances buy real estate. There's a reason why Wall Street buys real estate.

There's a reason why the banks that you love to save your money with, would constantly invest in and co-partner with us in real estate deals, right? Because they make it a ton of money on your money. And if you nice to them, maybe they'll give you 1%. Now with the Treasury bills, maybe 4% or something like that.

But yeah, so it was a lot of education and just teaching them the little that I learned at that time and I just didn't, I didn't think I was going to find anything else that I loved as much as I love hips and knees, replacing people's hips and knees because it's an incredibly rewarding career. It's amazingly rewarding. And I get to do it also, utilize my skills also internationally, I go back to Nigeria and other places to do hip and knee replacements for people who can't afford it. So for me, it's like, I felt like this is what I was made for, I feel so passionate about it.

But a lot of times I wish I could do more of the more altruistic work, and not have to depend on it for my daily bread. So that's what real estate is doing for me at this point. It's really given me the opportunity to, at the option, to do explore the world and operate in other places and teach other folks how to do the surgery for the people in their communities. I can do that.

And it's just an incredible opportunity. And so there's no excuse for the person who says they're too busy. you're not too busy, you're just scared maybe or you're just lazy. That's it, I totally agree.

Now let's talk about the youth a little bit. I have a couple of young ones and myself. I'm not sure the ages of your two daughters. Three and one.

Three and one, they're very young. Oh yeah, I'm right in it. Oh, okay, I'm at the tail end. I have, too, go to college.

I waited pretty late to have kids here, But, you know, I mean, okay. And what I tell my kids is like, hey, do whatever you want, but invest in real estate, right? Agree or disagree to the audience, the younger audience? I couldn't agree more.

I couldn't agree more. I mean, just think about it, invest in real estate, but I particularly just love multi-family because I mean, it was mind blowing to me Because we all lived in apartments coming up, you know, the ranks, everything from the classes to class A, you know, it's like kind of the ranks I was able to kind of go into. And youth, the younger people that I know a right then, right after that I was randomly placed on the orthopaedic surgery rotation. Around the same time I found out that my paternal grandmother had end-stage arthritis of bilateral needs and she could barely walk, and I asked my father at that point, like, why can't they just fix her knees?

And at that point, this is in He tells me, oh, listen, there's no one that's going to be able to fix her in Nigeria.. And I was like, wait, how is that possible? My father is actually a general practitioner. That is in the build.

And it's like there's no one who can fix her. So she just has to live a life just like that. So from that moment I was like, I am going to become a drug replacement doctor. I'm going to go fix my grandma.

Unfortunately, she died three years later, but now I get to fix other people's grandmas, grandpas, uncles, aunties, dads, moms, brothers, sisters. And it's just an incredible feeling to be able to do that. And one of my life's vision is being to like improve the access to quality musculoskeletal care in low to middle-income countries, starting with obviously Nigeria, where I grew up and that's been part of my life's work. I've done a lot of work And I continue to do a lot of work to achieve that vision.

And yeah, so it's one of those things where there was a personal motivation to do it, but then also I loved the surgeries. They were just fun surgeries. I mean, you literally see someone come in completely debilitated, to build a wall and you operate on them. Boom.

And the next day they are up on the walker a couple of weeks later, the stroll into your office. Couple of months later, they are moved, they've forgotten almost that they are on the dance floor. Yeah, the dance floor and doing all kinds of things. One year later, they're back to all their activities and they're back to living a full, engaged, quality life.

So, I mean, this is the opportunity to do that. Sometimes I can't believe I get paid for it because being in the operating room is like my happy place. I just, I'm so happy to be there. I'm just excited and elated.

I mean, I operated all day today, for example, but you can see I'm still very energized and wired. Yeah, and it's like, what? Two, three hours apart, now I'm in the West Coast. It's 8, 8.10 at night right now, and I'm just so excited, but that's what the operating room does for me.

I'm just super, you know, to be with you all the time, yeah, so. Good for you. Maybe we'll wrap it up on this last question. I could have you literally four hours.

I mean, it's such a great talking with you. Thank you. You're in Baltimore, Maryland. Are you investing locally or outside of that area and why?

So I'm actually invested. We, our target market is the Southeast U.S. And this is why. I mean, we want to invest in a place where there's increasing population growth.

We wanna invest in a place where there's increasing diversity of employers and the migration of employers because with the employers comes the people, right? We want to invest in a place with increasing median household income, right? Rwanna invest in a place with increasing rent growth, right? And in a relatively landlord friendly place too.

No, one of the few places in the country that really check off all those boxes is the Southeast US. So South Carolina, North Carolina, Georgia, some best states, Texas, Florida. You can even add Alabama, Mississippi in there if you want to. There are pockets in those places too that are doing fantastically well.

There's some places in the Midwest also that kind of check off some of those boxes. And we've acquired at least one in partnership with another group in Indiana, in South Bend, Indiana. So there are like a few pockets everywhere, but our target market is really the Southeast US. It's South Carolina, North Carolina, Georgia.

And then if we find great deals in other places, yes, we'll take it. For example, we did buy a deal in Baltimore, Maryland, overlooking the largest green space in the city. And look at a smack between the two major Hopkins hospitals and that we knew was like sub-optimally managed and that we knew we were going to be able to get a significant discount. So yeah, so we were able to get it, the real page evaluation for that particular property was like 30 something million dollars.

We were able to get it for in the mid twenties. So we knew that we could just stabilize this deal. this is like a home run for our investors. And thankfully we were able to take it down and it's in the process of being stabilized right now and looking really great for our investors, even in this economic conditions.

So we've been super conservative about with our underwriting and also our dollars go way further in that part of the country when you think about it. You know, you can really find a nice little pocket and really invest in it and do some incredible things. I mean, we sold that property. The only deal that we've gone full cycle on.

We sold it in November 2022.. Wow. That was the way the interest rates were like essentially going up and prices were cratering and I mean people were trading we're trading deals left and right. I mean you know that and if we had been able to, if this was One year earlier, we would have sold that deal for way more.

But guess what? We still made a $5.3 million profit on it. We still give our investors 30% average annual returns, 1.5 to X equity multiple. That is still something to be very proud of.

And so for me, those kind of moves you can do much easier in the Southeast US, in some of those locations that I mentioned harder to make those things happen. And the tax situation is also much more friendly in those places in the sense that you can easily get some tax appeal approved and things of that nature. And so it's usually works with, they just, the governments are just a lot more landlord friendly and in general, and they invite business to come in. Because what we join as multifamily buyers or operators is we buy businesses.

That's what we do. And so a lot of governments, you know, they invite that and yeah, and we've been able to take some. Great advantage of that. So incredible experience so far.

Wow, that's awesome. Well, like I said, I'd probably want to have you back on the show because this was so good. class every Tuesday night, or every other Tuesday, where we go from the basics to the, you know, to the more complicated parts of underwriting, and our curriculum repeats. Every eight or so weeks.

So if you're interested in multifamily you want to understand how this properties are like underwritten, you can check that out, we have a meet up every month. You could get all this information right on the website xicapital.com, but those that want to just reach out to me directly. You can reach out to me on LinkedIn. Julius Oni.

I'm on, you know, Instagram. Dr. J.K.O. and certainly you can also email me directly.

JuliusOni at xicapital.com. I hope I've given you more than enough options to get in touch with me. Nice. That's plenty.

That's plenty. I gotta ask this- one last question because go for it. I'm kind of wondering now and maybe the audience it might be how's your basketball game if you even play? So I used to be decent, you know, when I used to play quite a bit, you know, I actually worked a bunch of basketball camp when I was in undergrad.

And so I learned, you know, to, you know, do some and I mean, I went to undergrad in New York, so it's like, you know, you learn how to do some mean crossovers and things like that. So I have a decent game, but I think my shots probably suck at this point, unfortunately, because I've not played in a long time. So I can't call myself a basketball anymore. I, between all of this things that I do, I just, I had to give that up.

I still do a little bit of other things, like I love to travel, I love to play music, a little bit of keyboard, a little bit of guitar, you know, so and my kids and my wife kept me more than busy. So you know, when I'm not doing all this other things, so it's fantastic. There you go. So I think we would probably make a decent team together because my needs are getting shot now.

I hope to never see you though. Oh, by the way, this is the stage where people get all kinds of weekend warrior injuries, like Achilles tendon tears, and so yeah, that's more one of the reasons why I kind of quit it, because I knew that it was just a matter of time I was going to get because I had already dislocated my shoulder before I had surgery for that I had already fractured my ankle once before, so I'm trying to minimize any more diabetic-injuries for myself moving forward. Same here. Well, Dr.

Julius, it's been a pleasure having you on our show. This was super amazing. Probably call you back for more next time. Absolutely.

I'm ready. I'm ready. So, thank you so much for the opportunity. It means a lot.

All right. Have a great day, and we wish you well. Thank you so much. You take care now.

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And if you want to learn more about investing, you're new to investing. I highly recommend this book blex with a plex also this book if you're having some challenges as you can see everybody on the show had some kind of adversity including yours truly R so I shared a lot of that on making a comeback giving you some incredible tips to make a comeback so get. Either one blex with a plex or make a comeback if you want to get more tips go ahead and go to JoeMendoza.com. Again, subscribe, share, and like.

Make a comment below. I really appreciate you. Want to add incredible value and wish you all the best in your success in real estate and in life. Take care.

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Welcome to the wealth matters podcast, where investors come together to better understand how to build passive cash flow and create generational wealth without all the confusing mumbo jumbo. Here's your host and co author of Amazon number one best seller, Al Alpesh Pomer. I would pronounce his last name but anyhow Leslie is the director of operations and co-, founder of side capital investment LLC. He manages the company operations, market or data analysis, cash flow and budget analysis and analysis.

Leslie himself of course is an entrepreneur and real estate investor and he started investing in single family real estate in 2017 and transition to multifamily in 2019. So welcome Leslie. Oh, thank you so much for having me up. Thank you so much for that warm introduction as well.

Absolutely man. So and of course today we want to talk about this multifamily market, the current trends. But before we get started with that, tell us something interesting or funny about yourself. Oh, man, I don't know.

I know that that's interesting. I am fascinated by technology and things that are happening in the world right now, all the changes that is happening with the AI and all this stuff. I love stuff like that. And I also enjoy flying drones.

My wife says I have a dry sense of humor, but then my partners think I'm not that funny at all. So I don't know. interesting we'll find out soon yeah so you started with single family in 2017 I started in 2015 around the same time yeah what was your first investment and how did it work out for you so my start was really from me questioning a lot because I'm a nurse and a studies by training in 2000 and I started working as nurse and her studies in 2015. And by around 2016, towards the end of 2016, I started questioning myself, like what was going on at that point.

All I knew about investing was like, uh, put money in your 401k, do a target day for an Omido financial planner and let them structure whatever for you. And you put your funds in there, but I started feeling uneasy and asking myself if this was it for me, like this just doesn't r make any sense that, uh, someone should spend the rest of their life working in the hospital. And then, uh, We hope to retire someday and then enjoy it. So when I started questioning that, I started learning.

I picked up my first book to read on financial education. Second Chance at Your Money and Your Life by Robert Kiyosaki. And that introduced me to the world of real estate investing. So, but it was just like still like a strange environment for me.

More accustomed to the traditional path. So, um, I started off doing single family investing, which was something I could wrap my head around. Um, bought a condo, like a condo would, uh, bought it together with my brother, um, did like the BRR model, which is what I learned along the way. Um, so we bought it, uh, did some renovations on it.

It was an estate sale, got a really good basis on it. Really got lucky because to be honest with you, looking back, I didn't know too much back then. So, um, It was a nice Estet sale, did some renovations in there, got a tenant in one of the government programs, to go to school or spend all these hours for it so you could do that. Now imagine what I could do for myself or my family if I keep doing this.

So that was my very first investment and that worked out really well and that what really got me involved in real estate and one of the important things is like during that process I had taken time off of work to manage the renovations and I really enjoyed it. I was one of the happiest moments in my life. Just going there seeing how this property is transitioning and managing all the contractors and seeing that go through and so that made me believe that this is something that I'm really going to enjoy doing. That's interesting.

Thank you for sharing. So let's talk about multi-family market because that is what your current focus is. what trends are you seeing in the multif market right now and we are recording this on March 27th of 2023 so from our perspective we're starting to see more deals than we've seen over the last two and a half yeah the market has been really dry because we are very aggressive we believe that you could buy a good deal in every market so we're always out there hitting the pavement looking for deals and we have been and pretty much been reviewing everything that came to market and there wasn't much but over the last couple of weeks we started to see a lot a few more deals coming to market but most of those deals is still not making sense there still seems to be a disconnect between the sellers and the buyers prices have come down a little bit but sellers still expect a higher premium for their properties. So what I'm seeing from our own experience at our own data sets is like increasing deal flow, price reduction a little bit, um but now a few things might have changed with the events of uh last week uh last few weeks with the Byne collapses and then the Fed still going in and um increasing the interest rates now a lot of the experts are predicting there's probably going to be a reversion at some point during this year so uh who knows what's going to happen i felt like we were on a trend where we're like okay deals are starting to come we might see some good deals come then i might be like oh maybe that price drop like the Seven to ten percent price drop that we've seen it might be opposed to that so who knows what's gonna happen in the next few It seems like things are changing so rapidly that we can keep up So let's talk about the trends or try to decipher, right?

So you said that what markets are you operating? So where are you saying this deals? Well, we've seen our deals in the southeast Searching heavily in the Atlanta area, Columbia, South Carolina Charlotte, North Carolina and the surrounding markets And when you say the deals are coming means the buyer sellers are ready to sell or you're saying that the cap rates are expanding not Sign for us to enough to even make that service payment. So we're seeing that we actually closed on an asset in December that here in Baltimore that was like more of an operations kind of situation where it's a high quality area but the management wasn't doing a great job that management that we took over from.

That we are transitioning that asset and getting it back to fully stabilized right now. But the things that we're seeing two months in some of these markets in the Southeast that we're looking at, some of the distress assets that we looked at, it's in so bad of a management situation that the sellers will have to be a little bit more realistic in South Carolina's right in and right now that we are still seeing some deals, but they are not distressed Of course, there is operational efficiencies, but they are not in bad. Can you sign surprise in multifamily? You are still able to find those kind of distressed assets in some of those hot markets or highly high growth markets So, you know The I guess the tendency is like when the market is hot and everything is going up sometimes You could get into asset without having like one of the assets we see we saw it's being managed She's been self-managed by the owner and it's like the first Asset that the only in that market so, they struggling with managing it.

So there's always a story behind it we're getting to see a few of those right now and then there are the assets that I had a That had a bridge debt on it without a interest rate cap Yes, and they might have experience. Yeah, and then the top of that the increase in the debt service payment and some delinquency is just making it a more of a challenge for some of operators to manage it. So and again, what I found is like any business, right? If you buy the you could acquisition is one thing managing the asset is another thing.

So if it doesn't matter how much rent grow in the market, if the management is not there to take good care of the property and take good care. The tenant and making sure that everything is being serv rised properly. You're going to run into some issues, right? So and I was trying to.

I totally know where this is going, right? But I wanted to, you know, fill the onion, right? and talk about all these issues with my listeners. So one more thing, right?

What do you think or what would push these sellers to sell now? You know, I know that things have totally changed, but they are still not accepting the change. what would be the final straw I guess if you get to the point where that the assets continue to underperform and a negative significant pressures from the lenders to pull some of these properties from them then they might be able to sell or if you find some kind of a way to negotiate a good. exit for them so they might be able to sell so at the end of the day just depends on what the expectations are what they're looking to get out of it so we will and we look into it, we try to, if there's an opportunity there, we look into it and try to work out a solution that makes sense, but that will still protect our investors as we go into seek these opportunities.

And if it makes sense for the seller find, if not, we'll move on to the next one. Right. No, that makes sense. So you brought up another interesting point, which was the lenders, What has changed on the lending side?

What are some of the good lending options right now? So options right now is just agency debt. That's what we're looking at lower leverage than it was before. Most of our on the writings are like 55 to 60 leverage from the agency side.

And we are looking at agency floaters that with a rate cap, about 77-10 year loans. And there's also options for like the fixed rate debt as well. But we do anticipate that the interest rates are going to drop down in the months ahead so we are good with the floater products and how have you changed your underwriting to protect yourself and investors right now things have changed and really fast absolutely things have changed really fast it's funny because 12 18 months ago you I was seeing people on the riding with rent growth of like 10-14% on some of these deals, you know, and it's interesting because which thankfully we never did, we always did conservative in our rent growth when we did our projections. So right now we are doing zero rent growth year one and year two and then just like from year three onwards.

I'm staying very conservative and just thinking back at um like looking back let's say 18 months ago if we had been on the writing like the 10-15 percent rain growth year two year three and now we're seeing in some markets where rents are actually um stacking and in some localities rents are actually declining you know you'll be struggling to maintain those projections right now. Right so rent growth is where you are saying zero percent and what else are you focusing on from underwriting perspective- We are being very conservative on keeping track of the delinquency in the market. It depends on the kind of asset as well. We're going into a C asset.

We want to bake in some delinquency there because you're going to have some of those challenges that come in the asset as well. And then we're also looking at our renovations and making sure that we're not too aggressive on our Rent bomb projections, you know and making sure that this these numbers are vetted in the market with existing We're like we're existing evidence like another asset that is producing those numbers or the asset itself that is actually producing those numbers as well We also the general edition Expenses on the payroll side as side have gone up. Expenses on like renovation costs have gone up So and we also are underwriting a good amount of reserves in any of these deals that we're going into just in case we come into The recession comes in and last a little bit longer. We should have enough reserves to be able to sustain the assets Agree, so let's talk about this.

Do you think there will be a lot more opportunities in Q3 and Q4. I Wish I had a magic ball to tell you no, yes, but I honestly do believe so One of the things I'm keeping track on, which is not necessarily in the multifamily side, is on the office side, there are a lot of loans on the office side, on the. The books have a lot of bangs that, are coming in due in the next few months and we might see some distress on that side. And I just believe that negative feeling in one side of the real estate side might transfer a little bit over to the multifamily side as well.

There's still a lot of loans that are coming to you later on this year or at some point this year. There are a lot of business plans that have come to fruition. So I think there's going to be more deals towards the end of the year for sure. As I'm an optimist, so I always believed there will be more deals.

So, yeah. investment One I'll say one key mistake we made in one asset we ended up not buying the asset ended up having to pull out is We well went after an asset without necessarily going in that walk in the market How do I accept it and had things starting to move them before when we went out there to do more digging and look At them wasn't really a good market. I wanted to invest. I mean look good on paper But when you go over there and personally talk to the people you see that the market was transitioning in the wrong direction So that was one key learning factor to make sure that Before we buy it before going to any new market.

We go in there spend some time with the locals Walk the areas walk the properties then before we will move forward That makes sense. What has been your best deal so far? Best deal so far is a deal. We exited on in December of 2022 So, we purchased this deal April of 2021 for 12.55 million dollars and exited 21 months later for about 18 million and we were able to return 29% average on our investors.

The deal did really well from the operation side. We did a great job at increasing the NOI, decreasing the expenses and then that just was just boasted by the rent growth and everything that was going on at that time. So, we're able to fulfill our business plan over the short period of time and exit. That's awesome.

Now let's talk about the worst side, right? What has been your worst deal? Worst deal. so a to.

I- I- I think it's probably one of them and the other book out. Let's just shoot another one. Here's a hundred million dollar offer By Alex Hermosi, I think that's his name I know. This is so chat if you just help me to be more creative right um i just i think it just augments our For writing like emails or coming up on newsletters for our business and everything we use it as well We started playing with it too on the modeling side of Excel It's fascinating the power that it has to come up with like Excel formulas that you could just Pull out a bit and then you use it on your template So I'm playing with it for multiple users most of it right now is writing and modeling and it's amazing especially the upgrade of charge GPT it is amazing the power that thing has so Yeah, it could be like a huge item for anyone in their business.

So I love it. Sure. That's awesome Thank you for sharing that any advice for beginner investors I'll say take a plunge get started Don't get carried away by the negative new cycle that we are in right now These are the moments where you find some of the greatest opportunities if you could just keep your mind open to opportunity because when things are changing, get the world the negativity and not move forward. Now is your best time to get in, find great assets, buy for cash flow and then just hold on for long term and you're going to do well.

You're muted Apesh. That's great One of the ways i give back is by teaching and mentoring others. Another way we give back which is like has been, like, a life-changing for us is we participate with an organization called Operation Stan Walk and Run. As the XSITE Capital, we travel back to disadvantaged areas to go do joint replacement surgeries.

Our CEO is an orthopedic surgeon. I am a nurse and that's that is by training. So we actually go there with the team to perform the surgeries where we replace people's hips and knees for free or for a very limited cost. And that's one of my favorite ways of giving back because you see the immediate impact of having somebody coming into the clinics almost crawling and then walking out standing on their two feet.

And to understand that you had some kind of small role to play into that it's a tremendous I enjoy doing that That's amazing. How can my listeners reach out to you? The best way to reach out to us is to get started. Just go on our website, which is Www.

XS ITE. That's XS in xylophone s I T XSITE Capital.com Right there you'll be able to get in touch with myself or any one of my founders and now Please reach out to us So if you have any questions anywhere, we could be of value to you rich out or love for, connecting with other like minds R

We have experienced a significant amount of growth over the last four years, with a $168 million of assets under management, but there's absolutely no way we would have been able to do any one of this without members of our community, without our investors that are re-joining us on this journey. Are you frustrated watching your-run earned-earned money ride the knee-jer the knee-jerking Wall Rollecoaster? Are you lookin to. diversify into alternate investments and set them on autopilot to achieve financial.

It's time to learn the ways of the wealthy. It's time to think outside the stocks with your host Madhv Jane, an immigrant from India and X. I. T.

Professional who will bring you industry experts to illustrate a passive and holistic financial approach to build not passive income but also your generational wealth. Madvi is on a mission to change the financial My colleague, my partner, on our first deal there, it was their first deal, it was my first deal, going in together, we learned a lot together and Leslie Awesome, who's here, he has Awesome in his name. Can you believe that, he is an awesome personality. So Leslie, welcome to think outside this starts.

bambi, thank you so much. Thank you very much for that nice introduction. Yeah, and Leslie, I-, you know, I think you amaze me on many levels. And we will talk about that.

But listeners, if you're joining in, I like to introduce my guests with three fun facts, so I'm going to talk about the three fun facts about Leslie. Leslie actually is a health care professional, and Leslie would love to hear more about the health care side of it. So he's a health care professional turned syndicator for all passive investors, and then syndicator. He And he I like I said, not only just my friend, a colleague, but a partner on our first deal.

That first deal we actually went in together. We did the financial analysis together. We went in together. We completed that full cycle 2.

And we moved from that deal, R investors, to another deal, what's called 1031 exchange, which saves a lot of taxes. And Leslie, one thing about Leslie, into, is his mindset. His mindset is tremendous. He has grown, you know, through his books, through his different, coaching that he has done, he has grown tremendously.

And he kind of practices that and also preaches that with his friend, family, whoever comes the way, right. So, Leslie is, you know, it's all about the growth, the mentality and helping others, He also, the last about him, is he also has kind of a in mind they're listening and we want to tell them that what our journey. to that I was a nurse, critical care nurse, for about four years. I'm working in, a IC R use of some of the hospitals here in the Baltimore area.

My journey to health care was not really my first choice of career, coming into the US as an immigrant. When I migrated here in 2000, like. Every one of. Us coming, I was here to chase the American dream, and my initial my And my initial major was computer science, believe it or not.

And I came and started in computers, computer science, then the dot-com crash happened and everybody in computer science was losing their jobs and everything. And I was afraid that I was going to go to school and not have a job without the right education or the right community. I had to go with whatever everybody else in my community was doing, which was health. which provide a stable job for me.

And I also saw a lot of opportunities to bring in great value to contributing people's lives. . A preceptor, an. a nurse that was almost at the retirement age.

I know. Yeah, they had a know what to do. When we go to orientation and work, they tell us, say for your retirement, do your 401k plan, join the retire 20 r. a 20G, where.

of like 2065, 2045 retirement. That left me a little depressed inside, but I could not really tell. I like thinking that I have to work all this while then I have to wait until like 2045 or 2065 in order to be able to retire. Just seemed like it didn't make any sense to me.

And I was looking around me, there were people living, doing whatever they wanna do. And I always ask myself like, what are these people doing that I don't see, right? But I had no education, no financial education. There was nobody around me that had any.

So the next thing I had to do was after working as a nurse for a few years, I was, R said to myself, there got to be more. So it was the next logical step. The next logical step is to go back to school and get another job, get another career, which is what I did. I went for like the most challenging piece, advanced education in nursing, which is anesthesia.

And I went and I did my graduate studies in nice anesthesia and I got a job, right? And the great job, the salary, the pay is really good. The schedule is amazing. It's a great career to be in.

You get to do a lot of great stuff, take care of people in critical states and you get to do a lot to help people, right? But in that environment, I felt like this was the ceiling and this cannot be it. I kept asking myself, this cannot be it. I cannot, as much as I love doing this, as much as I get paid very well to do this, I cannot miss out on a significant portion of my kids' life like this.

I cannot, I saw the colleagues that have been working for 24 years, and I just didn't, see myself having to do that for 24 years. And what if the job, what if the hospital is not there tomorrow or if something happens or if I break my arm, you know, disability insurance is going to pay for that. So that feeling came back, right? process of my original precept or losing that money in the market, all of that came back.

One day might be, as the luck will have a, I was in the operating room during one of my down times just scrolling on my phone. I saw an article on Yahoo. It's like one of the ads on Yahoo and it says the writer reached out for that has written a book for millennials call some chance at your money in your life and it is for millennials with student loan debt that are R trying to figure out the next step like well this sounds like something that I made me what do I have to lose you know right so um and uh back forward a little bit um when I was graduating R from anesthesia school our school brought in financial planners to come uh talk to us about setting up for our retirement and planning for our financial future right so being a diligent person that was looking for the future, I set up an appointment, one of those financial plans, and he created a financial plan for me. But when I reviewed the plan, that plan involved me spending about 40% of my income on insurance, on different kinds of insurance that didn't make any R.I.C.

not the insurance that you and I know about my V that provides such a amount of bio that you could use for infinite banking. more like premium kind of insurance where it's more beneficial for the sales person and I was like this doesn't make any sense like so I had to pull myself out of that and told myself I'm gonna have to educate myself so that I'm able to take on my family so when I read second chance at your money in your life it was like the answers to all the questions that I've been from the crash in 2008 to my experience with that financial planner, I'll point to that point. And the stuff that he talked about on there, and he referenced some good mindset authors, that's how I got into personal development. So that book is actually what got me started because I followed every single step that he recommended in the book and then the growth just progressed from there.

So it's really like a second chance, right? And, you know, and Robert Kiyosaki, it's interesting what you bring, we bring up that book, because we often talk about the Rich Dad Poor Dad book, right? You know, that's the most famous book. So I think that's very interesting that you bring in this book, which has really given you second chance.

So thank you so much for sharing that journey. And I can imagine, you know, and especially as a. Healthcare professional is so essential, right? You have fulfillment about your job because you're serving others and that's the kind of person you are Leslie.

But also there's so much of stress, there's so much of exertion that's happening and it's a constant exchange of time with money. As long as you are working you're going to be fine, you're going to create this. Healthcare has a lot of money in this profession. But it's kind of sad to know that as you are putting that in a bucket, that bucket can have a tremendous capacity of losing it, 30, 40%, if you're putting in the stock market, tied to some volatility, right?

So you're said, you know, that started early from reading the books and all these programs and coaching activities that you did. I think that is tremendous. The journey that you have put yourself through that change, not just your family's life, your family's future, but now you're impacting others too. So as a healthcare professional, if you guys are listening, it's important to think about one thing, very small thing.

It's not about how much money you make, it's how much money you keep and Leslie, I think that's what you did really excellently, right? So let's go ahead and take our listeners ahead. Today, we're going to have a little fun conversation about that first deal that we did together. So coming from that background, and you started with real estate, let's talk about your syndication journey.

And for listeners, first of all, Leslie, me, and Tenny, and Leslie has two other partners with a XSITE Capital. His role in Excite is a director of operations and he's also co-founder of XSITE Capital. So he actually is focused on like company operations, market data analysis, more of a financial analysis and cashflow analysis, budget analysis, et cetera. So when I met them, first of all, you guys heard Neil Bawa in last episode.

So at Neil Bawa's educational event, that's when I met them first And we keep kind of kept on meeting unplanned in the same city, them coming from, you know, Washington area, me coming from Austin. It kept on happening so frequently. It just felt like destiny that we got to do something together, right, Leslie. So with that, we've walked in our first deal and that's what we are gonna discuss today as a case study, because we have talked a lot about on this episode, on this podcast about passively investing in real estate.

Let's take actual use case, actual case study that we as a partners walked in together, and go through that thought process. Why did we do it? What happened? What did we plan?

And what did it ended up to be? This is our full cycle. So this is actual, a real life example. It's not, you know, imaginary, but also keep it in mind that the numbers discussed here is pertaining to that deals.

It's not something that gets repeated based on different aspects of it, the economic cycles, market data, etc. So, Leslie, let's talk about our first deal. Let's talk a little bit about the deal itself and what did you like about, the market, the deal when we're going in, which is the Churchill, which we rebranded as to the view, right? So, let's talk about that.

Absolutely, Madhvi. So, that deal came from a period of consistent, persistent work and effort that we have been putting in since we found that XSITE Capital. Right. Upon founding XSITE Capital and doing the data analysis and market analysis to identify areas where we wanted to buy assets in, we identified the South Eastern region as one of the areas that are growing significantly and that's going to keep growing for the next year.

With that knowledge in mind, our partner Tenny Tolofari actually sold his house here in Maryland and moved his whole family to Charlotte, North Carolina, so we can have presents in that market and boots on the ground. That is a solid commitment, I think about excitement. That's why we call it Tenacious Tenny, you know. Tenny, I've been working, building relationships, like really working hard to break through building relationship with brokers.

We were finally able to build a good relationship with one of the brokers and he brought us this deal which was in Columbia, South Carolina. Columbia, South Carolina is a market that we had analyzed. We love the market because it's the capital city of one of the fastest growing states in the U.S. A lot of our people are moving in that area and affordability in that market too, it's very good.

you know, assets, rents went at that point in time, even now are still very affordable in that market. So there were many, man, this is a great population center. The MSA has over a million people. So all of that went into the background of us choosing that market.

So we started focusing on looking for assets in that market. So after multiple trips down, after several analysis on different assets that we had looked at, I think we reviewed over 300 properties before this one came. Wow. And when this one came, our property manager partner was really excited about the asset because our main property manager knows that market, she lives there.

She was like, guys, you guys need to take this one down. Yeah. So we did our analysis and the numbers made sense. We are very conservative when our numbers go in there.

And Madvi is a good contributor to that with Excel skills. So we make sure that we put in a lot enough cushion into these deals. Before we go into so once the numbers made sense, we put in the offer and the offer came through and we got we initially came in second place, but the first person backed out and then we were able to get the deal, which is kind of be kind of our a story because we've been a second place a lot of times we ended up winning. So yeah, Yes.

The second chance. This was a typical value add play. Exactly. Second chance.

That's very right, baby. Now, I said this was a typical value add play. At the time, our plan was to go in and renovate seven to six of the units and do like a $150 renovation premium on the renovations, do some exterior work, and our initial goal was to hold that for five years. The asset did so well that we had to exit early, so.

Yeah, so let's talk about that step by step. First of all, you mentioned about almost 300 properties analysis, right? So let's talk a little bit about that. - Yes.

So listeners, when you are actually thinking of buying a single family house, if you're looking at a small box of analysis, right? That what is the financial analysis, what is the market that you going to look into, so if you think about it, say like an Amazon box size package, right? If that's your box. When it comes to the multifamily analysis, it's like the shipping container size, right?

That's the difference of the analysis that Leslie is talking about, and it's called underwriting. Essentially, it's a huge set of the sheets of Excel files and financial calculators that we run by. And when Leslie is talking about 300 of the properties, it actually went through that financial analysis, which is intense analysis, so we found that it's really like a needle in the haystack- that we found, right? Once we found that, and, you know, few of the things that are, that was favorite for my side, is first of all.

It had tremendous occupancy and sustainability through even the COVID period. We were, you know, this was April 2021, so this was kind of that period where COVID had impacted, the occupancy has impacted, People were not paying well. But this property was doing really well. It was I really admire you for that, is the conservative analysis.

I cannot insist enough that how important that conservative analysis is. And this was our first deal as an active syndicator for me bringing in my friends and family, for Leslie, you bringing your friends and family. So we were really, remember, how many times we went back and tweak those numbers and looked at that numbers and make sure those numbers were right. So let's talk about once we acquired that property, you mentioned a little bit about the business plan, about innovating the units kind of, what other business plan that we had in this property?

Would you like to mention that? Sure, but before I do, I just want to go back to that emphasis on conservative on the writing because I want to connect it to the point that you brought in earlier about medical professionals having to work really hard to earn the income because a lot of times society sees medical professionals and say this person is a physician, they're making this amount of money as a doctor, but a lot of people don't see the amount of work that goes into becoming who they are. We are uniquely placed because two of our founders are medical professionals. I'm a CR-NA, Dr.

Oni is an orthopedic surgeon. We know the amount of work that it takes for our colleagues to get to where they are. A lot of us are like first generation professionals, first people in our school to go to school. So we know how much work it took for our investors to get to where they are.

So that is the reasoning that goes behind why we're so conservative, why we have to dig through 300 deals to find the right deal. that makes sense because for $50,000 for some people might mean nothing, but $50,000 for a lot of our investors is blustered in tears and we know how much, how hard the work to get there. So we'll always continue to have that in the back of our mind as we go into this asset because we know the people we serve in. Now going into the business plan, we have talked about doing.

interior renovations for $150 rent bomb. The other thing that we did going in, Mavi, you remember we projected no rent growth of this property whatsoever because it was in the middle of COVID. We had no rent growth of this property. We also had the exterior value and the debt, like you mentioned, was really strong.

We had a fixed rate debt from Fannie Mae. Very good interest rate as well. Our goal was to go in, do the exterior, which we completed. We completed is and of- how it looks, the branding, et cetera.

But for example, the lights, right the lights a so I the lights were the to start feeling safe, right? So that was really a high cost, and we did that, right? There were small things like putting that bench for the school kids while they're waiting on the bus stop. So what I like about it, and I know you-like about that too, that we are making that community's life a little better with a little bit of rent bump, them on them, you know that call from the property management team A hour later, they called us and said there was a fire on the building.

I thought it was an April's Fool joke or something, but thankfully, nobody was hurt. It was restricted to just a single unit, so we're able to get the tenant accommodation and we're able to rebuild the unit. It all turned out great. Other things that didn't go as planned are the expenses.

With inflation, the expenses went up, the cost for renovation, we initially on the road, $7,000, but it became about $10, Raganian renovation, which was higher than what we on the road. But like I always say, Matt, the pro forma is always 100% wrong, so you just want to set yourself up so that it goes wrong in a good way and I think for this property a lot wrong in a good way. For example, all the reserves, we had a significant amount of funds in reserves that we brought into the deal from the lender reserves to our own operating reserves. So some of those increasing expenses we had enough cushion to cover for that as well.

So those are some of the things that did not really go as planned, but we had enough cushion in the deal to be able to handle that. And that's going to keep happening as we go into this asset. Yeah, absolutely. And a few of the things that you said last is really important, right?

Things don't go as per the plan. And this is why this example, it's a real life example, it's important for listeners, that we went into the asset by having some assumptions, we were conservative, but still things didn't go as a plan. But as passive investors, they, the, all of the investors Listen to us when we were sending those newsletters and updates that, hey, this is what the challenge that we are currently facing, and this is how we are handling it. So the communication from our side was a key aspect of, you know, putting that first foot, the right foot forward for investors, right?

Passive investors, once they gave that money into the investment, didn't have to do anything. They started receiving that distribution. They started, you know, even after we closed, they received their upside for this particular investment. But when we had this fire, when we had challenge in terms of the financial aspects of it, remember, we also had that unexpected pool cost, I mean, that maintenance cost was really high too, right?

We kind of communicating and we just said that this is what is happening. This is how we are handling it. Handling the fire and aftermath was not easy. Thankfully, like you said, nobody got hurt.

That was the most prime importance for us. And we hired the third party inspector, we adjust her and we had the whole insurance claim process. And it actually turned out to be a good payout because not only they covered for the damages, but also lost rent and as such. So we actually could recoup that cost that we had and also the lost rent.

So that's really important for passive investors if you're listening to keep in mind that if this was your property. Even if a single family and there was a fire or something. By the way, I have a rental property where lightning hit. It was not a huge fire.

But I had to deal all this myself, even as a landlord. So passive investors for you to keep in mind that once you hand over this money, the syndication, team you're leveraging their experience, their expertise, and their effort too. We are there to kind of take care of all these things for you while managing the property and all you have to do is just look out for your distributions, and look out for the communications that we are sending in. So that's really important.

So going back to this projection slightly. We had, Leslie, we had certain a, that conservatively we had projected. Let's talk a little bit about that. And let's talk about.

When we had a five-year hold. Why did we exit this property in 19 months? So let's talk about the projections and, why did we exit the property and what was the actual outcome compared to the projections? Absolutely.

For the asset, we projected a five-year-old, like you mentioned. Cash and cash projected, I think it was like 7.4. 18.5% average on our returns, and I believe about a 16 IRR that we projected for this asset, and this was over a five-year-old. Going into the asset, over the 19 months, we distributed.

Cash flow was average of about 8%. So the asset was producing a lot more cash flow than what we projected. And at the end, when we exited the asset, our investors ended up with a 29% average on our returns and about a 28% IRR. And the reason why we exit, one of the reasons, multiple reasons, but one of the Hone of the reasons why we exited the asset is because we had met our exit, our projected exit price in 19 months of managing that asset.

We are grew the NOI so much that it made sense at that point to exit the asset. Plus with the changes in the interest rates, our prepayment penalty that we had which was significantly higher on this asset at that point was next to nothing at this point. So that this provided us a small window of opportunity for us to exit out of the debt without paying any prepayment penalty as well. Plus, we also wanted to give our investors this opportunity, proof of concept, for them to see that you're able to grow your wealth in this period of time in a prospective advantage way.

And you're still able to either take those funds and use it however way you want or roll it over and move over to another equally as nice asset with a higher basis going in. So, we felt that asset, in particular, was at the right spot for us to exit. We had finished all of our exterior capex. We had done about 32 units of the interior, and there was still enough meat left on the bone for the next investor as well.

So, that asset, that was at the right time for us to exit. Yeah, and I think we pulled that trigger so quickly. And it turned out to be really great timing too, right? Because the market started sliding down after that.

And this was, you know, another discussion that we had that the market we started seeing that is changing. So it felt right that, you know, let's take that action really quickly. And I know of some- some, you know, deals, the investments, syndicator team who were hesitant to take that decision, and they held on to these properties and some of these properties are facing a lot of challenges in this market, right? Yeah, some of them have dropped 20-40% in value.

Exactly and with the right debt structure in place that you know we cannot insist enough on having that structure when we had that fixed term for the loan that was really important too, right? So few of the things that you mentioned and I really liked about our exit is that first of all, we could achieve that target exit price, right? We purchased it for $12.5 million and we sold it for $17.8 million. This was in nearly 19 months.

This was tremendous R and not only that we achieved that, but we had, like you said, proven that concept. So the next buyer could see that, okay, they can continue doing this. We initially planned, what, about 80 units or something, thing, but we did upgrade so many units. So even if that cost was high per fix and flip, we didn't do that and we didn't have to do it.

We just proved the concept and we handed it over to the next buyer. So they could continue doing that and I think the property is still performing very well with the next buyer too. So thank you so much for summarizing that. I would say top three learning lessons are the best things that you saw that happening in this property that you would like to take this as a blueprint and move it to the next property and kind who put it in there.

So I'll have to say number one is probably the power of a team. And this is one of the lessons that I learned early on in my journey is like always surround yourself with people that are way smarter than you. Having you Mad V and Chris as part of the asset management team, great minds that we could always exchange ideas with and then bounce off of each other. That was really powerful and that's the same translates from the asset management team all the way down to the property managers.

I'll say I'm having Carolina property, onsite property manager is amazing. So the power of a team makes a huge difference. The other piece you talked about is communication. We pride ourselves, one of our core values at XSITE Capital is transparency.

We pride ourselves with being transparent and open and wanting to share every part of, even struggles or whatever we're going through with members of our community. So I think communication is key. For example, as a new syndicator, your first asset as a lead sponsor, you have a fire a week later, All kinds of crazy thoughts can go in your head. But we stuck to our core values, informed our investors, and the feedback was amazing.

Investors were so excited that people are telling them what's going on with their investments because some of them had done things before that didn't go really well. So I'll say power of a team, communication, and what else? And just the value that you bring to a community with the work that we do. I know a lot of us look at Mota, but the sales side of Mota, family investing is like you're going to grow your world.

Yes, you are going to do that. You're going to earn a lot of passive income. Yes, you are going to do that. But the most beautiful part of this is like you create a significant amount of value to people.

Absolutely. Right. Going back to that asset, seeing the new playground that we built, seeing kids playing on there, seeing all the changes that we made and seeing how people feel very comfortable, living in the gym area and the gym area was not exactly adding a spin studio, adding all these things that updating the pool, you know, I've lived in some crazy apartments in the past and going back and seeing what we're able to do appreciate it for me that that's probably the biggest piece out of that this asset and all the other assets that we own. I love that Leslie and knowing you it does not surprise me.

What all the things listed right now. And that's the reason, I mean, you know, I think I'm going to talk about, you know, a little bit from. What I like about Excite, especially you and your team is, you know, first of all, when I'm looking at going into deal, my priority is always the investors come first, right? The investors was not always number one priority, keeping them in mind first.

And day-to-day life, working with you, I have seen, we have taken decisions where we at times take a hit on our what money we are getting, but we have always put our investors first. So to be the internal part of your workings and seeing that you don't only just think about of our friends and families and people who have earned this money working really hard and how you take you know hold this responsibility on your shoulders together I mean that's really important aspect we think outside the stocks for me too. It's not about you know, putting millions of dollars in the investment but it's about what that 50,000 individually creates a single income cash flow for one person. That's what motivates me.

That's what I'm most passionate about. And the last thing is that I really like about your team is how you just said what you think about the team and the community. For you, it's about growing together, learning together. It's not about that you are on a growth path.

And by the way, you are on the tremendous growth path when it comes to excited capital. Remember, one of the celebrations we had written down on a piece of napkin, what the goal is going to be in terms of the assets and their management. You are on a tremendous growth path, but it's not about singular growth. It's about growing with the community.

And I feel you had such kind words for me today. I think what we connected is based on values. And I really see you grow and let's talk about that. and it was a privilege to be a part of this deal and to provide.

This kind of returns to our investors, to provide this kind of certainty or to our investors together. So thank you so much for all your kind words and thank R you so much for this experience going in together. It was a very special deal being the first one which went full cycle for both of us. So thank you so much for that.

So let's talk about Excite and it's exciting. Where are you guys going? So let's talk about your team, your growth paths And you know, you have grown tremendously. You have a huge team now supporting you.

Where are you guys going? So our goal is to keep growing, keep giving value to people. You know, Madvi, we have experienced a significant amount of growth over the last four years, with $168 million of assets on the management. Wow.

But there's absolutely no way we would have been able to do any one of this without members of our community, without our investors that are joining us on this journey. They are the reason why we started the company in the first place, because we saw a need in our community and went out to fulfill it. Absolutely. And they have brought in, like, seen the value that we're able to bring, and they have been very supportive and pushing us, And I'm putting us out there to go out there and continue to bring this nice assets to buy together with them.

So we owe a lot of our growth to our investors and our community. And the community is growing. Our goal is to acquire about 5 billion of assets over the next 10 years. Love that.

So we are doing everything on our end to build the team and the foundation necessary to be able to handle that kind of growth. We started off just three of us. We've brought in more full-time team members. Now we have an amazing team that will feel really strongly about our marketing director, Macy Price, acquisition associate this mouse, and amazing personality, administrative assistant Jessica Connor, our investor relations associate, Kayla Daughtry, and my two amazing partners, Tenny Tolofari and Dr.

Giulazzoni. And I also forgot my brother. And our acquisitions on the right is the genius himself, Manny, our song. And we also work with a skill brief skills bridge program with the US military, bringing a lot of interns to come work with us.

We have Mr. Kevin Brown right now. Working with us. So the team keeps growing.

And I will as long as there's this need to provide an opportunity outside of the stock market for safe, secure, long-term wealth creation. Right. We are always going to be there to find, to put in the work that is necessary to find these assets and to bring it to investors. Love it.

So looking forward to the journey for sure. Love it and I have no doubt in my mind that you know you're going to grow not just as excited capital but all the community that you are planning to grow together with. I have no doubt about it. What is, you know, being a healthcare professional, let's talk a little bit about that for passive investors.

Healthcare professionals in real estate, there's a little fear in mind, because it's an unknown territory. It feels that, okay, there's such a lot of hassle and a lot of money involved in it, and a lot of risk involved in it. What will be that, you know, one thing that you. Will advise the healthcare professionals to keep in mind to go to this kind of passive investments and kind of skip that, you know, whole rental real estate, the landl a little bit of because a lot of us healthcare professionals, we do a great job at educating ourselves in health care and everything we need to perform our career to earn a significant amount of income, but we do nothing to I'm going ...we trust uh some ...

... I'm, and a community don't know , right? Yeah. So that's what I'll say.

Just educate, uh, colleagues are very intelligent people, that are hardworking people. So just, a little bit of or you know personally, that has a good track record. And that has an invested market in assets in a stable environment. And then find that opportunity to invest and then sit back and go back to taking care of your patients and watch your money grow for you.

So it is truly a great way to grow out and I cannot emphasize that enough. So just spend a little bit of time and educate yourself. Love that. And I think that's really important that, you know, they're finding that right team and educating and changing your mindset.

That's so important. You need a team that can handle the challenges. They can make the decisions like we had to take that quick decision to sell this property so that you can know, like, and trust this team and put your hardened money into this property. So thank you so much for sharing that.

So with that, I mean, I'm having so much fun, having this conversation with you, but we kind of are coming to that end. We have a couple of segments left still. So before we jump in to the next segment, this is my favorite segment, where I asked about your diversification strategy. So at this segment, I would love to ask you a lot of questions, Leslie Awasom.

How do you think outside the stocks? And how do you, in other asset classes, what other areas that you invest in, that our listeners can learn from? Well, we just talked about one of the big areas. It's about our family investing, for sure.

But maybe the most important. Important area I invest in is myself. Yeah. And you mentioned that about personal growth.

I think that's why we talk about investments here. Our incredible reason is the most important in investment that you can ever invest. The one investment that is guaranteed to return 100% every single time is an investment in yourself. And outside of that, then you invest in Mufta family, I invest in Mufta family, also invest in the businesses that I'm involved in.

Right. Because I have a good understanding for that and that. So I have a very small amount of investment still in the stocks, long-term health stocks, but majority of my investment is in real estate and multi-family to be exact. Thank you so much for sharing that.

And now if our listeners want to get in touch with you, how do they get in touch? Absolutely. You could come to our website, which is www.xsitecapital.com. That's X-S-I-T-E, X as in xylophone, X-S-S-I-T-E, that's X-I-capital.com.

You can reach out to me right there. Touch base with any one of us. I'd be more than happy to answer any questions. I hope you guide you along your journey.

And Leslie is very accessible. So guys take advantage of that. And now this is going to be kind of our last round, which is the fun round. I call it a rapid fire round.

So are you ready for some quick, fun questions and maybe 60 second answers to that question? Absolutely. Great, awesome. So let's get started.

My first question is that, can you elaborate that one moment, kind of an aha moment, or a mindset shift or paradigm shift that happened, in the book that change your and as well. Love that. One Rind that's one thing that I have as one of my goals that I your optimized life mindset. which helps in treating drug resistant depression R and anxiety.

So this is something that my wife is really my partner and an So I'm using all kinds of alternative Leslie, I wish you all the best. Thank you soo much for this candid and this honest conversation. I had so much fun talking to you today, and you are very close to my heart. I have that soft spot about you.

You know that. I wish you all the best for everything, and especially for making that impact in thousands of people's lives. I wish you success in that journey and what you are, what you have done and where you're going. I have tremendous respect for that.

thank you so much for being here. Thank you. Thank you for having me on this platform. You are a significant person on our journey, so I'm grateful to have you as part of the network, and I'll definitely be forward to working with you on more opportunities.

we hope you'll be a

Best Ever Listers, are you- R.I.E.R.T, are you looking to get more great commercial to Carson C. Quick disclaimer, the views and opinions expressed in this podcast are The World. The World's Longest-Running Daily Commercial Real Estate Podcast. Our hosts interview commercial real estate experts every day to get you the best advice ever with none of the fluffy stuff.

Best ever listeners, welcome to the best real estate investing advice ever show. I in Charlotte, North Carolina. He's the director of acquisitions at XSITE Capital Management. He's also a cyber security professional supporting companies like Boeing and Deloitte.

We've actually interviewed the other two co-founders of Excite on the podcast recently, Julius Oni and Leslie Awasom. Their portfolio is just over 168 million,000,000 in assets that's under management all multi-family. Tenny, can you tell us a little bit more about your background or what you're currently focused on? Thank.

you so much for having me. And of course, featuring the partners on the spot cast. I guess it's my turn. My background is so interesting for IT, cyber security specifically.

I graduated in 2012 from Bowie State to Maryland from grad school. And then from there, in 2016, I started my entrepreneurial journey with financial services. And in the process, a man, one of, my partners, Leslie Awasom, and then we introduced XSITE Capital to our other partner, Julius Oni, and we decided to take XSITE Capital to the next level. So I'm one of the co-founders, Dr.

Oni is another one of the co-founders and Leslie Awasom is as well. I'm responsible for acquisition. So basically what I did was I looked for the deal. I bring you to Leslie, he reviews it, and then we work together to raise the capital.

He's responsible for investor relations and he's the CEO of the company. So basically that's my role. Nice. So you've been handling acquisitions from the beginning, having you?

Correct. And when did you all form your partnership? When did you start acquiring multifamily? XSITE Capital in February 2019 and we did our first deal in 2020.

as a co-GP on a deal in DC, the Griffin with one of our mentors. I'm sure you guys are familiar with them. The Graham Ryan and the Rabbi Gupta with Viking Capital. We did our first deal with them as co-GP on their first deal in 2020.

And then in 2021, we became a sponsor on our first acquisition. And then it's just been taken up from there. Nice. Tenny, what markets are you currently focused on?

We're focused on the southeast, specifically, South Carolina, North Carolina, Georgia, and then we look at Florida, then Texas here and there, but the main market we'll focus on is North Carolina, South Carolina, and Georgia. We have a deal in Sunbelt, let's grab that. We have a deal in DC and we have a deal in Baltimore, but we have to choose South East, North Carolina, South Carolina, and Georgia. And the reason behind that is because my go-to partner that everybody's been observing in the U.

R. S. Well, folks from the north and from the west, I'm moving down to my clients in florida and knock out by the South Carolina. And of course, affordability is one of the key driver as well.

So yeah, that's what we're looking at deals at right now. Yeah, Tenny, that makes a lot of sense. One of the things that we've been experiencing here in the first quarter of s I'd like to summarize what I've been hearing and then get your take on this being that you are focused on acquisitions, there has not been a lot of inventory. There just have not been a lot of deals that have come for sale and I'm speaking nationally, please correct me where your experience has me wrong here, but there have not been a lot of deals brought out by brokers and part of it is that seller expectations and buyer expectations still just aren't aligning sellers want what could have gotten when interest rates were in the threes and buyers are under, underwriting deals with interest rates in the sixes and the sevens.

So a lot of sellers aren't bringing things to market and a lot of buyers are not finding the few deals there actually are out there can pencil out. Is that what you're experiencing right now? Absolutely. I have a couple of train of thoughts in the marketplace right now.

One is let me just chill. I'm the owner of the property. Let me just chill. It's cash flowing, I don't need to sell.

And then from the buyer side is how do we continue to drive as a company? We've seen the slowdown compared to this time last year. There's still a lot of activities going on in the marketplace, but you don't want to stop, you know, as a company. You want to continue to review any of these two deals that come from a particular broker.

You want to review it and provide feedback because one of the philosophy we have at XSITE Capital, and one of our core values, tenacity. When things are tough, you don't want to back down, you want to continue to thrive, you want to continue to act on whatever inventory that they have, so that they see that you want to. Because when things get better, everybody's going to jump in the market. But the only way you separate your stuff is when R and different sources and just continue to go through our process and all in the machine.

The machine is continuing to build the right deals. I have two follow-ups here. The first one, Tenny, tell us what it is you're doing to expand your reach and get in front Rof more deal finders and more brokers. Absolutely.

And this is the one that I would like to teach the audience right now on how to find the best broker in any market across the United States. People say this is the exact secret but it's not a secret, the information is available publicly. You can. You r rst, you can actually just go to costar.

Every year costar recognizes the power brokers of each market, and they give them an award. So let's say I'm in Charlotte, North Carolina currently, and I want to see who the top broker for 2021 is because of not published 2022 yet. I will go to the co-star power broker award winners, and I'll look for the year, and then I'll review all the different commercial real estate brokers. They have retail, they have industrial, they have capital markets, they have, all the different aspects of commercial real estate.

What you want to look for is the ones that are specific to multi-family, and then you want to look for those names of those brokers. And then you reach out to them and say, hey, this is the kind of deal I'm looking for. I see you have one on the website that looks like what I'll like to proceed going forward. If you don't mind, can you share with me some more information about the deal?

And then gradually keep up with the broker. building a relationship with them. That's what XSITE Capital have done. And that's the way we got almost all our deals that we have currently.

So those are some of the things, some of the tips I can give. So we use program relationship, do this stuff that I just shared. What size property do you all focus on? 100 plus units with both class A, class B, and class C deals.

Most people will say that when you're looking at 100 plus units, trying to go direct a seller yourself doesn't, really make sense because there are brokers who have very long standing, anyone who's going to sell is going to do it through a broker. Anyways, going to the costar broker awards list. What else are you guys doing to get in front of deals, get in front of brokers. That's our main strategy.

And it has works. We have this philosophy of gift to seize our balance season. If you think about it, the broker, what their job is to prospect the sellers. A lot of the sellers are in the market they are in, and they have the track record of actually selling deals.

Why do I want to go ahead and present myself to the seller directly when the seller doesn't know who my company is? So I'd rather leverage the strengths and the resources of the brokers to reach out to the seller and get a deal from them. And then I'd be in relationship with the brokers to get the deal. A couple of the deals we've done, all off-market deals, they were never listed in the broker's website and all of that was because I've reviewed relationship with the brokers directly.

And with that relationship, we've actually been able to have connection with a seller as well. And we've observed in our business dynamic that you want to always give to Caesar or beloved Caesar R and broker relationship is key for us, and it's been working for us. So we continue to go that path. Now there are other ways that people find deals, do mailers and they do all of these other strategies, but we feel like that is not efficient.

We think the broker strategy is more efficient for us. Tony, that makes a lot of sense. . R.

The deals that you are getting in front of right now, how do they compare to what you were seeing one and two years ago? The deals I'm getting in front of right now, the interesting thing about the dynamics is, two years ago, you're on the right end deals that you have 10, 20-30 people on the right in the same deal with you. You're going to best on the final, you have five, six, seven people invest on final and be fighting over deals. And deals right now because of the interest rate hike.

A lot of people are taking the backseat to try to see what's going on. So because of that, things are not as competitive as it was a year or two ago. And I think sellers are beginning to get the point where they understand that things are slowed down and they have to be reasonable prices. Let's say they bought it for 20 million.

They're not trying to get 40 million. A lot of people did that two years ago where they bought a deal for 20 million and they're booming another year or two. They're trying to get 40 million for it. that's not possible right now.

So the sell-on-buy gap is beginning to close it in a little bit. There are a lot of talking heads in commercial real estate saying that you could see a lot of volatility in the second half of 2023, with a lot of owners coming up with a need to sell because of the way they structured their financing when they bought one, two three years ago. Are you projecting something similar or are you just thinking that at buyers who have sound business plans who don't have a moment of distress or a need for a liquidity event. Are you just seeing them get more realistic that's what everybody's saying.

But one thing I've observed in my short time in being in commercial real estate or being in real estate in general, the market always look for a way to make sure the investors are okay. A lot of times the bank, if they give you a debt, they don't wanna take it back. They are looking for a way for the deal to work. So my philosophy is I'm not looking for deals to be distressed.

I'm looking for people that have gone in mid-money and are willing to exit. That's what I'm looking for. Now, if there's a distress deal comes up or show up and we're on the right end of the works, the buyer and the seller agrees, fine, we'll buy it. But I'm not looking forward to the market where everybody's losing their deals.

I don't think that's ever gonna happen, honestly speaking, because the Fed, planning Freddie and private lender, yeah, I think everybody's trying to figure out the solution to the problem right now as I speak to you. where if there's a way for them to let the seller or the investor to hold on to their deal, and then, walk up some kind of structure for them to be able to go through and implement their business plan or get a new debt. I think they're going to come up with some kind of way to walk around it, so that people are not going to lose a bunch of their deals and stuff like that. At least, that's my take on it.

Now, what's actually important that might change. Might be like, hey, you deposit in your brief debt. I'm going to take a deal. I don't know.

And the specificity of people that don't have a rich cap on the bridge debt, those are the people that are actually going to solve for it. So far we're bad. But if you have a rich cap on the bridge debt, you should be good. We'll get back to the show with a first of sponsors.

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I know you're focused on acquisitions, Tenny, but is there anything that Excite is planning to take to market soon? No, we actually sold one of our deals, December 17 of last year. Our first deal that we got. We held it for 19 months and we exited which did pretty good.

We got it for 12.5 and exited at 17.8. Investors get good. And you held it for 10 months? 19 months.

19 months. Wow. Yes. So our very first deal as lead sponsor vessels got close to 30% average on our return.

And then we did it 1031 a lot of the investors almost over 90% of them to a deal that we bought December 30th of last year in Baltimore. But right now we don't have anything on acquisition mode so we're still buying and trying to build a grower investor as well. Last question here while we're talking about your focus on acquisitions, Tenny, before we transition. When your team is underwriting deals right now, what type of debt are you underwriting to acquire with?

Our approach is whenever we have a deal that's looking promising, that the numbers are looking. We usually switch out to a debt broker. Right now what we're 30 years. Aortized 30 years, looking to fix for five.

Why is it that you're looking to fix for the first five years as opposed to three or seven? Interest only period, you mean? Yes, sorry, the interest only period. The options we've gotten, we've seen between three to five.

When we have some deals, they'll tell us that when they give us a quote, it's like, we're gonna get, you know, between maybe 5. I, three years, but we'll see another one that is 5.75 I owe up to five years, so it's simple. And again, it all depends on the deal. Each deal that we're looking at, looking promising, we usually try to get a good hold on it.

And when you're looking to go interest only for five years on a 10-year term with a 30-year amortization, what is your prepayment penalty looking like on those? Prepayment penalty is pretty decent. Well, it depends. And that's why I'm asking is, we're not just looking at, mortgage rates and terms in a-vacuum, It depends on your business plan you're looking to buy in 2023 to hold until 2025 or longer depending again on your business plan on the property that you're looking at and how long it's going to take you to execute on a business plan, what kind of returns you're looking to deliver, you could be choosing to prioritize a shorter prepayment term so that it is more lucrative to sell quickly, or you could be trying to get the rate as low as possible for as long as possible because.

You know, you're going to hold the thing for five, seven, 10 plus years. So really 10, if I can take a step back from my question and step back into it, what is the business plan you're looking to acquire with right now? And how is that impacting the five years, interest only 10 year term 30 year am, and then what did the prepayment penalties look like? So our business plan is usually we buy a deal and we're trying to hold between three to seven years.

We've had deals that our business plan is to sell in three years, and we have one that the exit is five years and one that the exit is seven years. And then we send that information to the debt broker based on that information. That's what he's if you can do interest only for five years and then exit and you see somebody that can get the deal from you and the deal works for them. Yeah, sure.

But if we can get longer interest only period, that will help us to implement our business because we're not going to be paid per spore initially, and we'll be able to give our investors good returns. And then when that time comes, the prepared penalty, of course, if we haven't paid this term, it's probably, we're not paid per spore yet. So, prepared penalty is probably going to be high up there. And then, by that time, we'll see if the deal,.

We've implemented our business plan, and we've increased the value of the property. We'll see if then it took what us paying that penalty to exit, by switching to somebody else, or if we need That's how we look at it. That makes a lot of sense. Tenny, are you ready for the Best Ever Lightning Round?

The philosophy of the book is about giving without an expectation. Giving without you counting, that I've given you one that you have to give me back. just give in, right? And then the philosophy is give as much as you can give and I just believe that what you're doing is what you're supposed to do as a human being.

So that is a great philosophy. We actually have him coming up on a meetup at the first Monday of April. So we're looking forward to learning a lot of this. We have five principles that he's gonna be looking to share.

That's from a mindset standpoint. Let me say that's a really good book. I have it all the time, the reference, and then from a productivity standpoint, the book that I go to all the time is A Compound Effect by Gerhardi. We talked about how little habits stacks up to become a great in the future.

So those are some of the books I will recommend. I haven't heard anyone mention The, Compound Effect in quite a while. That's one of the core fundamental business and personal growth books that I should read. It's your best ever way to give back.

The way I give back currently is XSITE Capital. Every year we set aside a certain amount of our revenue to support medical mission. Last year, two of my partners, Leslie and Julius, both of them are in the medical field and they went to Nigeria to do such a cooperation. And this year we're going to support that whole initiative as well.

And also we support as part of our core values of giving. We support the military people that are looking to transpire from the Army or the Navy to become a civilian. We bring them into our company to learn about real estate. It's called the skill bridge program.

So we support that transition. So far we have our third candidate right now. The second one that came to me, we had him, he's working with the XSITE Capital right now. And now we have our third candidate in the XSITE Capital.

So that's another way we give back, helping the people from the Navy that are transitioning through being civilians helped us bridge that gap when it comes to security, especially the ones that are interested in real estate. That's one big way that we give back the addicts out of capital. Thus far in your commercial real estate investing career, what is the biggest mistake you've made and the best ever lesson that resulted from it? The biggest mistake I made is not telling a lot of people what I do when I started.

I thought that I had to me to believe at the time that, oh, I just want to learn about this and go through it myself. Not knowing that there's strength in numbers, that the people that have done this, that are looking to do big things, they don't do it by themselves. They work with other people sacrificially. So that's where we at XSITE Capital decided to do, to tap into our community, educate them, bring the awareness of the family as a class to them, and see how we RIKI can work together to take down beef, commercial real estate, specifically multi-family.

Lastly, Tanya, what is your best ever advice? Best ever advice, if I should think about it, is don't go on this by yourself. I don't think I would be able to be here and excited when we're doing what we're doing, if I was doing this business by myself. I found that my partners, Dr.

Tony and Leslie Awasom, as great partners that we've leveraged each other's strengths for us to be able to get to where we are. I could not have been able to do this by myself at all. So my advice is you're looking to do a business, any kind of business, you want to leverage the strength of other people. I don't really like the crunching of the numbers.

I don't like the impressions of the assets, but I like looking for the deals and bringing it to the team. I like looking for the team members and bringing them to the team. Dr. K Rouni, his core strength is, he goes there, build relationship, .

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