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SHOW NOTES FOR EPISODE 391: MULTIFAMILY INVESTMENT STRATEGIES FOR 2020
Have you ever thought of buying apartment buildings? Did you think it was too much for you to handle? Well, real estate mogul, author, educator, coach, inspirational speaker and podcast host Vinney Chopra knows first hand what it means to start buying apartment buildings later in life. In this podcast, Vinney shares the success secrets that took him from only $7 to nearly $500,000,000 in multifamily assets at 68 years of age.
What You Will Learn
- How to effectively set your success goals for 2020
- Why he is strategically targeting the booming senior living market
- How to establish key partnerships to expand for market reach and expertise
- The advantages of multifamily over single family investing
- Where the “Hot Emerging Markets” are for 2020
- How to find great properties in emerging markets
- How to build commercial broker relationships when you don’t have a track record
- Finding great loans at great rates and terms
- The key to multifamily investing success
- Best tips for effective strategic planning
About Our Guest
Vinney Chopra
Vinney Chopra is president of The Ideal Investment Group and Moneil Investments Group, multifamily investment companies with 4100 units assets over $330 million on the way to 10,000 units. A Mechanical Engineer, with an MBA in marketing, Vinney and his wife started real estate investing in 1983. He became a broker in California and started buying single family homes and multifamily assets in Texas, California, Arizona and Indiana. Over the last seven years, Vinney has purchased a number of large apartment communities in key emerging markets throughout the US. In addition to real estate investing, Vinney has been a professional fundraising consultant, business coach and motivational speaker. Vinney is married to Kanchan, has 2 children, Neil & Monica, and lives in Danville, California.
Background
- Started 12 years ago
- Bought 14 units for $180,000 in Odessa, TX
- Purchased with his partner with Ideal Investment Group (his first company he started)
- Right around the time of the crash in 2007-2008
- Jobs were still strong in that area
- Worked very hard to learn about real estate investing
- Took lots of coaching lessons, boot camps, etc.
- He said the investment he made in his education was key to his success
- He now has 4100 units valued at $330 million
- Once you really learn the business and have both a NETWORK and your NET WORTH then you can scale up
2020 Goal Setting
- He now has multiple businesses
- He’s meeting with his teams this month to talk about goal setting
- This is the right time to look at how 2019 went
- What were some of the high points
- Accomplishments
- Things you wanted to do but didn’t
- The person who can give you a raise is the same person you see in the mirror every morning
- It’s time to get excited about 2020 — the “teens” are gone, it’s time to grow up
- He’s talking to all his VPs and team members to look at the vision, not just for 2020, but for the decade – from 2020 t0 2030
Current Update
- Going to big multifamily conference in Florida for 5 days
- Then, he’s going to Punta Gorda and Cape Coral
- Started a new division – Moneil Senior Living
- He’ll be doing 5 “ground-up” construction projects located in:
- Florida
- Arizona
- Virginia
- Going through feasibility studies
- Already looking at Cape Coral
- His partner has already done $200 million in this business already
- Vinney is doing this project jointly
- It’s Vinney’s first ground-up construction project
- He can raise $7 million in 7 hours
- He’ll be doing 5 “ground-up” construction projects located in:
- He has also partnered with Enzo Multifamily on some upcoming Senior Living projects
- Bought two properties last year
- Looking at big things happening this year also
- Doing ground-up projects with 22-26% projected returns – 2 year hold
- From 96-125 units
- Punta Gorda, FL
- $11 million contract
- Have signed contract to buy at $17-18 million (from an HMO REIT)
- Bought land for $990,000 in due diligence
- He was approached by Shanti Niketan
- Big Indian developer of senior communities in Florida
- Has 1,000 acres near Jacksonville, FL
- Vinney is writing an eBook on senior community investing
- It explains why he is getting involved in this area
- 10,000 baby boomers are becoming 65 years of age every day
- There are big opportunities in this area for multifamily investors
Vinney’s New Book
- Apartment Syndication Made Easy by Vinney (Smile) Chopra
- His journey from $7 to $250 million portfolio
- Amazon best seller
Great Opportunities and Advantages in Multifamily
- It’s great if you are in single family homes but it is even better in multifamily
- Start small with duplex, triplex, fourplex or eightplex – with ONE TRANSACTION not 2, 3, 4 or 8 transactions!
- You don’t have to qualify for multiple loans – just one for many doors
- You don’t have to deal with many different brokers, agents, title people – just one for MANY
- “Economies of scale” will help you to get increased cash flow quicker
- Graduate up to multifamily
Recent Transactions
- Vinney always looks to buy in “Emerging Markets”
- He did an excellent interview on the Old Dawg’s REI Network entitled “How to Find Hot Emerging Markets for the Best Deals.”
- In 2017, he purchased an apartment in Atlanta for $10,100,000. Sold it for $15,400,000 two years later
- He is looking to sell another he bought for $10, 200,000 in 2017, he is getting offers now to sell for $18,000,000
- He also recently bought an apartment community in Orlando for $52,000,000 that should be worth $62,000,000 in one and a half years because of his “value add” strategy
- Value Add Strategies are when you buy a property that has:
- Poor management
- Needs light renovations
- Upgrade to new amenities (“Smart Home” features, valet trash pick-up, dog parks/tracks/washes, bike stations, etc.)
- After putting new, good management in place and upgrading, then you increase rents
- Increased rents means increased income.
- Increased income means increased VALUE
Current Emerging Markets
Get into at least 3 emerging markets. Here are some of the emerging markets that Vinney is currently targeting:
- Florida
- Jacksonville
- Orlando
- Tampa
- Melbourne
- Georgia
- Atlanta
- North Carolina
- Raleigh
- Durham
- Greenville
- Kentucky
- Tennessee
- Alabama
- Missouri
- Kansas City
- California
- Pasadena
- Corona
- Utah
- Colorado
- Colorado Springs
- Arizona
- Tucson (Senior Living)
- Texas (more people move to this state than any)
- Dallas/Ft Worth
- San Antonio
- Indiana
- Michigan
- Grand Rapids
- It’s best to just pick 2 or 3 markets
- Get to know them well
- Build a good local team
How to Find Good Product in Emerging Markets
- Have the right “mindset”
- Talk with brokers
- Develop solid relationships also with:
- Local property management companies
- You will uncover good product
New Portal to Quickly Buy & Sell Multifamily Properties
- Vinney is forming a new company called Oxygen.VIP
- This company will buy your multifamily properties in TWO TO THREE WEEKS at a fair price
- They reach sellers BEFORE they go to the brokers
- He buys the properties, does due diligence, link the property to the right investor (1031 exchanges, syndicators also)
- Bypasses the broker
- Charges small convenience fee
- The site operates in California, Florida and Texas right now
Other New Businesses:
Moneil Hospitality Division
- Handles hotel/motel transactions
- Vinney finds competent people to run his new companies and then he oversees
- Just purchased the Hidden Garden Inn in Texas
Moneil Digital Branding
- For all his companies in the U.S.
- Creating Brand Images
- Name
- Logos
- Colors
- To boost revenues
- Increase Social Media presence
- Document statistics
- Based in India
- 55 people staffing the company
- Offering great prices
Keys to Building New Broker Relationships
- Learn the multifamily/commercial real estate “lingo” or language
- What’s “value-add?”
- Know how to define Class A vs. B vs. C type apartments
- Introduce yourself as the “Manager of an Equity Group”
- Know your criteria BEFORE you call
- Know how many units you can buy (don’t waste their time)
- Although he has a broker’s license, he never takes a commission and gives his commission to listing/selling broker
- Listing broker knows the “temperature of the seller” better than anyone
- He knows best how low the seller will go when you are negotiating the price
- If you have a buying broker and a listing broker, there is “Vacuum” in between where you can’t get the whole deal
- For new investors, you need to first BUILD CREDIBILITY
- If you have no track record, join with someone who has a track record who can introduce you to a broker in the emerging markets you have targeted
- FIND LISTING BROKERS
- Go on Loopnet.com
- Look up apartments in your emerging area and write down who the listing brokers are
- Go to GOOGLE
- Do a search for “Multifamily or Apartment Brokers in (THE CITY YOU ARE TARGETING)
- Go on Loopnet.com
- When you find the brokers, go on their company website
- Co-Star (a multifamily listing site) is not getting that many listings any more because the big brokers are making their own websites
- Brokers don’t want to list their product on the big multifamily portals any more – they want to guard their listings
- The broker websites will list properties you can’t find anywhere else
- When you go to their site, find a property you like that meets your criteria, fill out CA (Confidentiality Agreement), this just allows you to access all the details on the property
- It will also put you on their mailing address and you will be among the first to hear about their new listings
- Make sure you only look at properties that you would potentially buy – they only want to deal with serious buyers
- You will get the best deals, best loans, etc.
How to Get Good Loans
- Vinney’s current purchase of a $54 million apartment has a great loan because he has a great track record (It gets easier and better after each loan)
- $40 million dollar loan
- 3.82%
- 30 year amortization
- 10 year fixed rate
- 5 year INTEREST ONLY payments
- Freddie Mac gave discount of $70,000 to RATE LOCK at no fee because Fannie Mae and Freddie Mac were fighting!
- Must be minimum loan amount of $1 million
- Can get rates in low to mid 3%
- Visit the commercial loan manager/broker of the local bank in your target emerging market
- Take the time to learn the loan business and the best way to do this is through the local lenders
- Over the last 12 years, Vinney has had only 3 loan brokers and they have found him the best loans
- The brokers put together a matrix with all the loan terms and he can chose the best one
- The brokers meet with the top VPs at Fannie and Freddie all the time
- They also have given 4.5% for revocation funds
- Always be inquisitive, ask questions and push the envelope forward
- In the beginning of his investing career, it took Vinney 11 months for him and his partner for find a good loan
- They (Vinney and his partner) had many turn-downs
- They were working full-time at that time
- They spent 3 times a week, 2-3 hours each night, studying and analyzing deals, discussing loans, etc
- Their coaches were giving them assignments, too
The Key to Success
- Success is NOT OVERNIGHT!
- It’s a lot of hard work
- “You have to pay the price for success” – Zig Ziglar
- Positive thinking and mindset is key
- Miracle Morning by Hal Enrod
- You’ve got to have vision and goals
- Yearly Goals
- Quarterly Goals
- Monthly Goals
- Weekly Goals
- Daily Goals
- Have a To-Do list that shows what you need to do today for success
Best Tips for Effective Strategic Planning
- Write the word PRIORITIZE
- Look at yesterday and what happened yesterday
- Look at all major activities
- Write them down
- Look at the results of those activities brought for you
- Ask yourself
- Did I spend more time doing class “D” activities (less results) or class “A” activities (that bring more results)?
- Look at all major activities
- Write down DELEGATION
- Can I delegate those activities that brought me less results?
- Write down MINDSET
- The importance of mindset
- Do you have a mindset of scarcity?
- Or do you have a mindset of abundance?
- Write down the word POSITIVITY
- Vinney is writing another book – “Positivity brings Profitability”
- He’s also writing another book on enthusiasm
- It’s going to be a story of someone who is really enthusiastic as mentor and who is not and how they go through life to accomplish great results
- His fourth book will be “Coming From the Ashes”
- The book is about one of his friends lost everything in the last crash
- He lost everything but $40
- Today, he lives in Irvine and has 5 companies
Vinney’s Podcasts
Vinney’s Coaching
- One-on-One – $25K
- Group Coaching – $7,500
How to Reach Vinney
- Google “Vinney Chopra”
- Website: VinneyChopra.com
- Reach John Russen, the VP of his Academy: John@VinneyChopra.com
- Personal Email: Vinney@VinneyChopra.com
DISCLAIMER: Many of the above strategies take knowledge and have a higher degree of risk. You need to do your research and/or work with someone who is experienced to reduce your risk.
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Additional Episode Sponsor: Meno Studio – menostudio777@gmail.com
