027: Smiling Investor’s Positive Attitude Yields Big Profits

SHOW NOTES FOR EPISODE 027 WITH VINNEY CHOPRA –  SMILING INVESTOR’S POSITIVE ATTITUDE YIELDS BIG PROFITS

In this episode, Vinney Chopra, an engineer, real estate investor, broker, motivational speaker and dedicated family man from Northern California, shares insights into how he came to the US with $7 in his pocket and built a real estate empire of over $120 million.  He also discusses how he created a money-making machine with the capability of raising $7 million for new properties in just 24 hours.

What You Will Learn

• How a positive attitude will help you weather any storm as a new investor
• The importance of finding properties in “emerging markets”
• How you must be willing to “take what you can get” on first purchase financing – until you can create a track record for yourself
• How honesty and transparency are of key importance in fund raising
• Saving valuable resources by employing “virtual assistants”
• The “3 Key Investment Success Factors”
• The critical importance of vetting and selecting the right partners

About Our Guest

Vinney Chopra

Vinney Chopra is a Mechanical Engineer, but after graduating from George Washington University, Washington D.C., and finishing his Master’s in Business Administration in marketing, he shifted his focus to sales, marketing and motivation, becoming a motivational speaker. Vinney and his wife started real estate investment investing in 1983, becoming a broker in California and started buying single family homes and multifamily units in Texas, California, Arizona and India.  Over the last seven years, he has been president of a multifamily investment company— The Ideal Investment Group—which has acquired and is presently managing assets worth approximately $60 million.  He recently established Moneil Investments Group with assets at $57 million.

In addition to real estate investing, Vinney has been a professional fundraising consultant, business coach and motivational speaker for over 35 years.  He has given over 10,000 speeches and seminars on fundraising, positive thinking, enthusiasm, goal setting, and balanced living.

He travels and gives live presentations and webinars on Wealth Building. Creating Wealth with Multifamily Investing, Value-Add Win/Win Negotiations, Emerging Markets, Market Cycles, Economic Funding, Commercial Properties Analysis, Due Diligence, Investing in Multifamily and the Art of Raising Private Money.  Vinney is married to Kanchan, has 2 children, Neil & Monica, and lives in Danville, California.

More about Vinney

• Born in New Delhi, India
• Wanted to be an engineer, got job as an engineer but was more of an extrovert and had a heart for business
• Came to US with only $7 to get an MBA and focus on marketing
• Got job with marketing/fund raising company and worked there for 40 years, retired last year
• Seasonal job allowed him to get real estate broker’s license but didn’t like working weekends with open houses and wanted more freedom
• Transitioned into commercial real estate – multifamily
• Started researching training courses, found David Lindahl – purchased educational materials, attended seminars and paid for coaching
• His positive attitude and enjoyment of his new focus helped him be committed to success
• Purchased 8 properties in the last 16 months!

First Investment Property Purchase

• Living in Northern California
• Purchased first property during 2007-2008 crash
• Looked for smaller unit buildings for 9 months before first purchase
• Found emerging market in Odessa/Midland Texas area with lowest jobless rate of 3.42, small towns with lots of jobs
• Looked in LoopNet.com, called brokers in the markets of interest, asked for off-market deals
• Purchased two buildings in the same week – 14-units apartment and 109-unit apartment with 101 storage units and small commercial building on 2.33 acres
• Used to be hotel
• Hailstorm occurred during closing and seller put on new roofs
• Looked at population within 3 mile radius for storage units
• Held for 4 ½ years
• Had no money
• Without experience, lenders not too interested
• Approached seller to see if they would help finance the deal. Said “no” at first but later agreed
• Vinney wanted to put 20-25% down –seller wanted 40%
• Had to raise $1million for down payment
• Vinney’s attorney created the promissory note for seller financing — mortgage at 6% first year, 7% next year, 8% next year, 9% next year

Investor Tip from Vinney!

• upwork.com – Great resource for virtual assists
• Needed graphic designer for logos, brochures. Etc.
• Found inexpensive graphic designer in Philippines
• $50-100

Some Notes on Raising Money

• Got property first, then started raising funds
• Friend who was going to lend to Vinney asked what his “track record” was and Vinney said “zero”
• Friend appreciated his honesty and increase $60,000 and later increased to $125,000
• Ended up raising $1.5million from multiple investors
• Took 45 days on due diligence (today – 21 days because he has a team to move quickly)
  • Note on due diligence:
    • Has inspector check out every single unit
    • Always does video sewer line probe to make sure pipes are clear and in good shape
  • Worked close with syndication lawyers (Gene Trowbridge and Kim Taylor) during this time
    • Notes on syndication process:
      • You need good partner
      • He has done 19-20 syndications to date
    • Held “fund raising” luncheons with potential investors to raise funds
      • Must adhere to strict SEC regulations governing these types of meetings
      • If you pool funds from 2 or more people, you need to syndicate
      • His motivational speaking helped at these events
      • Sent invitations to investors in Bay Area
    • Investors 40-70 years of age are looking for the high yields available in sound real estate investments
      • 8-9%
      • Plus equity share
      • 18-24% with equity
      • Hold funds 4-5 years

Biggest Mistakes

• Choosing the wrong partners can hurt you for a long time
  • Must be trust worthy
  • Bad partners can hinder you
  • Non active partners can increase burden on you
• Didn’t have much control in first partnerships and people took advantage of that
• You need to have third party audits
• Had problem with property managers
  • Took money from tenants
  • Didn’t post expenses in financial software
  • Pocket tenant money
• When you get good people – reward them!
• Buying a property is like a marriage
• Key areas you MUST do well:
  • Due diligence
  • Exit strategy
  • Lenders involved
• $9.7 million property, built in ’73-78, in B+ emerging market neighborhood
  • Hired local guy to do inspection and didn’t do video camera through sewer lines
• THREE KEY INVESTMENT SUCCESS FACTORS
  • Investors
  • Acquisition/Due Diligence (inspectors, lenders, legal)
  • Property Management
  • He has improved his success by creating companies within his companies to control some of these areas
    • Moneil Investment – Investors & Acquisition
    • Moneil property management – Manages all properties

Biggest Success

• Created Ideal Investment Group in 14-16 months, which should have taken 5 years.
• Also, established Moneil Investment Group (name taken from his kids – Monica and Neil)
• Both Ideal IG and Moneil IG have strong investor pool that allow him to literally raise $4-7 million dollars in a very short time – usually 24 hours.
• Vinney created this “money-making machine” starting out with no funds of his own and a commitment to not ask friends and family to invest

Advice to People Starting Out

• If you have limited money, you can invest in and reposition, starting with small single family homes up to 12 units and grow from there
• Or, if you are not interested in doing all the work involved in finding, vetting, purchasing and managing properties, then they can invest in someone else’s properties and yield a minimum of 8%. Later, they can leverage this experience as a very passive “equity partner” investor to purchase properties.

What Does He Look Forward to in His Current Business

• Finding/researching new emerging markets
• Discovered Houston market early on and it has been very successful (#4 in the US)
• Also discovered North Dallas (Frisco, McKinley, Plano, Carrollton areas), North Carolina “tech triangle,” north Atlanta
• Can he help more seniors to enjoy their lifestyle by careful asset management and making good investments

Rap-It-Up

• Favorite real estate book: Multifamily Millionaire by David Lindahl, by What Every Real Estate Investor Should Know About Cash Flow by Frank Gallinelli
• Favorite business book: 7 Habits of Highly Effective People by Stephan Covey, How to Win Friends and Influence People by Dale Carnegie and Think and Grow Rich by Napoleon Hill
• Most valuable web site for success: YouTube.com and Google.com
• Favorite apps: TurboScan and SignEasy
• If you had to start all over, knowing what you know, and you only had $1,000, what would you do to try to rebuild your retirement funds? Would leverage his contacts to get into small units properties in emerging markets.  Get seller financing.  Start a PPM fund to raise funds.

How Can People Reach Vinney

• Phone: 925-766-3518
• Website: realestateu.tv (search his name)
• Email: vinney@moneilig.com

Until our next podcast, keep moving forward and God bless!

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