Linying Zou 0:00
It’s easy, right? It’s easy to get kind of stuck in the comfort because you just do the job. And then you know, our academic system trains us to find a job get better pay and you know, climb the corporate ladder, in a sense. And so it’s really easy to get stuck in a kafir we will do work every day, you know, go home to the gym, go to your family, and then look forward to the weekend and then dread the Mondays. Right? It’s so easy to to get comfortable. So, you know, I was at a point where I was really dreading that Monday morning for about two years, until I managed to leave the company. So that was a really valuable experience to be able to exit and see there’s so many other opportunities out there that can provide me the life that I want to live.
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J Darrin Gross 1:11
Welcome to Commercial Real Estate Pro Networks CREPN Radio. Thanks for joining us. My name is J. Darrin Gross. This is the podcast focused on commercial real estate investment and risk management strategies. Weekly we have conversations with commercial real estate investors and professionals who provide their experience and insight to help you grow your real estate portfolio.
Today, my guest is Linying Zou, and two years ago, excuse me two years after graduating from Boston College, Business School Linying bought her first multifamily investment. She had a new job. But very soon after she started, she realized that the job was not going to provide her the financial freedom she wanted. So she set out on her own to achieve her goal. And she started Akras Capital. And in just a minute, we’re going to speak with Linying about how an immigrant used real estate syndication to achieve the new American dream, reach your financial freedom number, and travel the world.
But first, a quick reminder, if you like our show, CREPN Radio, there are a couple things you can do. You can like, share and subscribe. And as always, we hope you’ll leave a comment we’d love to hear from our listeners. Also, if you’d like to see how attractive our guests are, be sure to check out our YouTube channel. And you can find us on youtube at Commercial Real Estate Pro Network. And I also want to encourage you to subscribe there as well. more subscribers more reach tall good. With that I want to welcome my guest Linying Welcome to CREPN Radio.
Linying Zou 2:58
Thanks for having me.
J Darrin Gross 3:00
Well, I am so looking forward to our talk today. But before we get started, if you could take just a minute and share with the listeners a little bit about your background.
Linying Zou 3:12
Sure. Um, so like you said, I started investing in multifamily two years out of school, but I was actually a trader in fixed income for about 10 years. So you know, I, I worked for as asset manager for my work for insurance company. And, and so I kind of went from kind of the Wall Street path into kinda mainstreet path. And so that’s a really helping what we’re doing right now, because there is a really good segue, you know, from finance into real estate. So, you know, I at Akras, you know, my main, my primary role is acquisitions. So I do a lot of do analysis and in underwriting so you know, using my background finance and that, that that’s really helped. So, yeah, so you know, about three years ago, you know, we started Akras Capital, and and we focus on both buying small multi families for a direct acquisition strategy as well as syndication. So build a portfolio, that allows us to essentially travel the world and you’ll live our lives on our own terms.
J Darrin Gross 4:22
No, sounds pretty good. In that, I think you said it, but I didn’t quite catch it. How long were you at the Wall Street firm doing the E asset management or you said asset fixed assets is what you’re working on there. Right?
Linying Zou 4:35
Fixed income, so corporate bonds. Okay. Yeah. So corporate bonds and government bonds. I was trading those I was there about I was at various firms put together a career total about 10 years.
J Darrin Gross 4:48
Gotcha. Gotcha. And when you bought your first multifamily What was your first multifamily property,
Unknown Speaker 4:58
It was what it is still Actually, I still own it to this day. So it wasn’t a triplex. It was a house hacking strategy. I’m sure your listeners are aware of that strategy by, you know, essentially live in one unit, and then another two to cover the mortgage. So that was back in 2010. So the market was really supportive with that strategy at the time.
J Darrin Gross 5:19
No, it’s a beautiful thing when it works. Yeah. Somebody else pay your pay your way. So you were you were in the the Wall Street world? I mean, it’s, it seems pretty glamorous from the outside. What was it that you recognized? Being in it, that it wasn’t going to get you where you wanted to go?
Linying Zou 5:45
It’s a couple of things. You know, for one, yeah, it’s very glamorous, right? You see it on TV all the time. It’s a very high paced career, and you can make a lot of money doing it. But I think the problem is that it wasn’t just for me, there was just no greater purpose in that career. You essentially tried to make money with money, and there is not enough flexibility, or control on what I want to do. That, that really didn’t jive with me very well. So because of that, you know, I just, I mean, don’t get me wrong, I love the job itself. You know, it was challenging, you know, every day was different. I have so many gathering pitch, so many trade ideas, and you have all these ideas come to the door, and you had vet them. So that was always my favorite part of job was just really the culture, you know, and I realized that just because I didn’t like my job at this company doesn’t mean that I like my job, the next company is going to face the same issues, where, you know, I don’t get to live my life on my own terms. And, you know, I have to basically provide go in and have face time. And, essentially, you know, listen, have the culture be something that I have no control over.
J Darrin Gross 7:05
No, that’s pretty big insight. I think for a lot of people. I think there’s kind of an exception, or not an acceptance, that’s what I’m trying to say. Just that’s the way it is. And this is what you do. And you you go and you try and do more and earn more and keep, keep earning more, but not necessarily recognizing the quality of life. You know, unless you have a really rich life outside of that. And that’s your primary vehicle. But you think about it, how many hours a day you spend at work. And I’m assuming that Wall Street, you weren’t necessarily working just a 40 hour week.
Linying Zou 7:47
Yeah, me, me, I worked on the buy side. So that was a lot. The work life balance is there, but I still spend about 10 hours a day at work. And it’s easy, right? It’s easy to get kind of stuck in the comfort because you just do the job. And then you know, our academic system trains us to know find good job, get better pay and you know, climb the corporate ladder, in a sense. And so it’s really easy to get stuck in a kafir we will do work every day, you know, go home, will the gym, go to your family and then look forward to the weekend and then dread the Mondays? Right? It’s so easy to to get comfortable. So, you know, I was at a point where I was really dreading that Monday morning for about two years, until you know, until I managed to leave the company. So that was a really valuable experience to be able to exit and see there are so many other opportunities out there that can provide me the life that I want to live versus while I was living before.
J Darrin Gross 8:52
No, that’s good. So you you bought your first property, you’re still working your your wall street job was real estate kind of the the I guess I’m trying to figure out how did it fit in? Because it sounds like was that always a goal? Or was that just something that that happened based on the fact that you were having success house hacking?
Linying Zou 9:21
I think real estate really is the American dream, right? Like only property in the States. I’m a first generation immigrant. So it was really a buy the first property It was really a family decision. You know, my parents came here and they never owned real estate and they never owned the house. And you know, I was in a financial position to be able to do that. So that was like the American dream. The family dream of me only a real estate property. And then I after I bought that property, you know, I managed it myself. And it was until four years later I bought my second property And that was in the process by my third property when I left my job. So, so that you know that for a wrench in things when you don’t have a W2 income when you’re looking to buy residential properties, you know, that’s like four units and below. So um, so, you know, I put a pause on that I went travel the world came back. And then when I started to, you know, start Akras, my business partners, that’s when we started investing in real estate full time and start buying other commercial properties.
J Darrin Gross 10:28
Gotcha. And you mentioned, you bought your second and third property, what were those,
Linying Zou 10:34
I bought my second property, which is actually my primary residence right now. Um, so and then my third one we were, we’re in the process of buying a while I was in the process of buying off market property at the time. But they kind of fell through in the last minute, and then, you know, I left my job, so that just went didn’t go anywhere.
J Darrin Gross 10:51
Gotcha. Gotcha. So you traveled? How, how long did you give yourself to travel and we’re all good to go.
Linying Zou 10:59
I travel for six months, I’m on the road and, and my back patient backpacked across Europe, and Asia. So I was in, I basically went, you know, to Estonian, and UK and Iceland, and then kind of flew back into Russia. So I spent about a month in Russia, two weeks in Mongolia, eight weeks in China, and then South Korea, I was actually in South Korea when the Olympics was happening. And then, and I went to Japan, so
J Darrin Gross 11:35
Wow. Well, there’s no no substitute for travel, I love kind of the experience, and just kind of the education of meeting people in different places and all that. So that’s awesome.
Linying Zou 11:47
Yeah, traveling, I mean, traveling really changed my mindset and how I view you know, what, basically, happiness is, because as you travel through these, you know, more kind of developing countries, you get to meet people who are living very happily have very little. So it kind of creates, you know, it kind of quite brings into question like, why is money so important, right? Why is it making more money, you know, having a bigger house or having a really nice car important when having these can be so it can be, you know, just something completely different to someone else. So I think that kind of changed my mindset and how I want to pursue my next career. Because when I first started, my my idea was always that I’m going to go traveling and come back and find a job. And other than, you know, another finance investment firm, it is continued a career path. And then having that kind of experience just seeing, you know, meeting people on the road, encountering different cultures, that’s when you know, my business partners, and I kind of sat down and said, Hey, like, do we really want to go back to the corporate world? Is that really important to us is that end goal is that the end all be all. And we decided that it wasn’t that we want to create freedom for ourselves, and you know, help create that kind of freedom for other people, so they can pursue that passion on their own.
J Darrin Gross 13:10
Now, it sounds like you You’re what am I trying to say, you know, coming from that wall street culture and just kind of go, go Go fast, fast, fast, more, more, more. World travel, and all sudden, now you’ve got a different view of, you know, maybe what’s important. Sounds like? Once you had that change, I would think it’d be kind of hard to go back to Wall Street, or just in that kind of thing. I don’t know if there’s a lot of room for that. kind of more of a Zen kind of a mindset, or do you find or are there people in Wall Street you ever saw that had that kind of a view of things?
Linying Zou 13:53
I think very rarely, I think, you know, people do want, I think most people do know what’s important to them, but it takes I think it takes a lot of courage to kind of step outside your comfort zone. And you know, and I think when you when you’ve been doing the same job for 10, 20, 30 years, it’s hard to change into something else because it’s scary, right? It’s there’s so much uncertainty, you know, your skill set applies. So, you know, it’s easy to kind of stay with the comfort and stay with what you know. So I don’t want to say that people offering people finance, they’ll know you know, they’ll understand like, what’s important to them or you know, that you know what, how they value money, but it just see, you know, it just that you can get stuck so easily and it’s hard to get out. Yeah, and actually, personally, I know so many people like recently that have gotten out and gotten pursuing other careers where you know, they maybe start a restaurant or maybe they started start up. You know, so it’s so you do have definitely people that don’t leave the industry to do to pursue something else.
J Darrin Gross 14:54
Right, well, having that experience where you are able to untether from that pace, and that lifestyle in that culture for an extended amount of time, even six months, I think is, is a good you know, amount of time to actually kind of reset, or have the opportunity to adjust. And, and while you’re traveling and seeing different things, it’s kind of exciting, but at a different pace. That’s, that’s got to be great. So you, you came back? And was it right away that your partners, and you mentioned your partners? How many partners do you have?
Linying Zou 15:35
I have two other partners?
J Darrin Gross 15:36
Okay. And were they also in the same situation? Or what was their?
Linying Zou 15:42
Yeah, so, my, one of my business partners, Christina, where she worked together my last company, and we so now we’ve been working together for like, eight years. So she and her husband, Charlie, who’s our other business partner, were also traveling, and they traveled for 14 months. And we work together for about six weeks during our travels, you know, through Russia and Mongolia. And you know, we really have a chance to kind of sit down and we know how well we work with each other. And so it the timing just worked that when I came back, they also came back. And then, you know, we had an opportunity to kind of sit down have the just strategic meeting, I think in all in July of 2018. And then, you know, decided to kind of go adventure into real estate.
J Darrin Gross 16:33
And were they real estate investors as well?
Linying Zou 16:36
Yeah. So they were when they were trying on the road, they had a property in Boston, which they were renting out as well and the rental income from that were enough to pay for the mortgage and provide funding for them when do on the road as well. So
J Darrin Gross 16:52
know that that is definitely the foot loof, footloose and fancy free kind of, you know, when the worries are taken care of that’s the mortgage is paid and you’ve got money to live on. That’s pretty good.
Linying Zou 17:05
Exactly. It’s a lot cheaper to live overseas to sell. I mean, depends on the country, but most of the countries it’s a lot cheaper to live there than in the US.
J Darrin Gross 17:13
Right, right. So they were basically renting out their home. Did you rent out your home while you were gone as well?
Linying Zou 17:22
I did. So I have my triplex which is you know, always trying to and then I and then I did Airbnb my property for a couple four months to Boston is very seasonal on Airbnb. So, you know, in the winter, no one wants to visit the cold blizardly you know, City of Boston. So you don’t really get a lot Airbnb business, you know, during the winter, and I’ve been traveling during the winter, so but I did Yeah, I did start using Airbnb as an option to provide more cash flow during that time.
J Darrin Gross 17:54
Gotcha. All right. See you. You and your partners. Realize that you’re like mind, you work well together. And the decision is made, let’s go in. Let’s go do real estate. What were your What was your focus? And how did you go about? You know, achieving or acquiring additional properties?
Linying Zou 18:23
Yeah, so there were definitely many asset classes within real estate. And, you know, we were we knew from very early on that we want to do multifamily, because it is, you know, it is the the least cyclical of the asset classes. You know, everyone always needs shelter, right. So it doesn’t matter where the economy goes, so we decide, oh, so we wanted to go into the multifamily. And then we kind of decide to pick which market we want to bid. And, you know, we figure Boston I live in Boston, my business partner is living in Boulder, Colorado. So both the market is extremely expensive. And you know, there’s some cash flow. So we picked a market that’s familiar to my business partner, Charlie, because he grew up there, which is Spokane, Washington to kind of dip bar. Yeah, the bar feed in incense. And we start at acquiring multifamily there. And we started really small, you know, we did our first property was a five unit, and then we bought seven unit and nobody loving unit. So, you know, and, uh, and we mostly use the wholesalers to buy these properties. So all of them were off market listings. And so a lot of that with a lot of the initial efforts went to relationship building and building a team on the ground because it would be like this is the best thing. And then and then eventually, we got to syndication where, you know, we would partner with other operators to syndicate deals and you know, we did a 300 unit and like 111 unit in for the Dallas Because that’s where our partners have experience in.
J Darrin Gross 20:04
Gotcha. So the 5, 7, 11, were those buy and hold? Or were you repositioning selling those? or What were you doing?
Linying Zou 20:12
So we’re using the BRRR strategy. That was our goal. So the 5 ,7 ,11 actually, we’re currently in a process this positioning them and we actually sold the five unit already. And we’re on the contract on the seven unit. And lthe 11 unit is currently on market. So we actually tried to sell those properties and roll them into a larger asset. In different city. We don’t like Spokane anymore. So we were actually going to move into Phoenix, Arizona.
J Darrin Gross 20:42
Gotcha. And now, so you did the the BRRR strategy with the first three properties. You get some experience, how long did you how long between the acquisition, repositioning refinance operation, operating before you jumped into syndication?
Linying Zou 21:03
About ayear, so we spent about here acquiring our own assets? And then we jumped into syndication?
J Darrin Gross 21:12
Alright. And the 300 units? I mean, that seems like a pretty big jump from, you know, 20, what do we got 23 units, three properties to a 300 unit deal? Can you tell us a little bit about the 300 unit property?
Linying Zou 21:32
Yeah, so it is a syndication deal. So we are small GP and then deal and it is our first syndication deal. So we, you know, we actually were, we met some partners at a conference that we attend them, we establish a relationship there and where they brought us in the interview. Um, so that was a really a class B+ property it down in Orlando, Florida is actually really nice type is myself, and we visit all of our properties when we went through our diligence. But um, but you know, it’s essentially a cash more cash flow play. And, you know, we still, we still have equity stake in the right to this day. So it was definitely a learning experience for the first one, and we’re glad to have the experienced operators there with us that we can kind of learn from. And so it’s been, it’s been a very great experience. Yeah.
J Darrin Gross 22:27
No, I appreciate you sharing it. Because I think that a lot of times people recognize the smaller properties or something they can take on by themselves. They recognize the syndication as a model for taking down a larger property, but don’t always recognize how they can fit into the syndication model, you know, thinking that you have to be the general partner, or you can go in passively. Can you speak a little bit of how you came in, you mentioned that you met him at a at a conference, but just coming in as a general partner, what were your responsibilities.
Linying Zou 23:02
So the responsibilities will vary depending on deal itself. So for example, you know, there, you can come in and be an investor relations and capital raise, or you can come in and help with asset management. So for some of our, for some of the syndication properties, we do help out on the asset management side, the leasing side, and on the marketing side, and, you know, there’s interior interior renovations and things like that. So they’re diverse communities and get involved in. So as a GP, that’s really your role, right? Like the main GP brings deal and then other GPS come in to bring both the capital and experience and resources to get the deal done. And there could be someone there, too, that signs off on the loan, right, because for an agency loan, you do need to have that amount of net worth, that’s enough to guarantee guarantee is non recourse loan, but still had to provide your sign off on it. So that’s really the role of the GP. I mean, it’s it is a lot of work. I mean, it is a business, for syndication deal, you’re essentially running a business. So as you know, it’s very important to partner with other people who have kind of business mindset. And as an LP, I mean, it’s, you know, I think for a lot of new investors that want to get into real estate syndication, LP is a great route to go. Because, you know, you get to understand how the deal works. And then but you’re completely passive. So you can take you don’t really take any responsibility, but you can learn as much as you want to learn because all these GP’s are essentially very open and transparent. And then you know, you can take that experience and maybe if you want to be on GP side on the next deal, and you have a way to get in as an LP you can get cash flow, which is the best part right? The GP is typically though really good cash flow during the 10 deal. They get paid on acquisition fee and then at disposition. So as an LP your passive and you just get your monthly according distributions,
J Darrin Gross 24:57
Right, and where are you in the cycle? Have the 300 unit property,
Linying Zou 25:02
We’re in year two? So you know, it’s sure a five year hold. So we’re less than halfway through. But a lot of times, you know, it really depends on because we’re always continuous continuously, kind of reevaluating where word property is today, and you know what the value can be. So it’s not unusual to exit the property or as good deal earlier, and as long as we hit that IRR threshold for the for the investors.
J Darrin Gross 25:32
Right, right. What about the 111 unit property? Where’s it at? Tell us a little bit about that.
Linying Zou 25:41
It’s in Dallas. So that’s a more workforce housing. So compared to the first deal is is different. And this deal has, you know, it’s 111 units, it’s more class C asset in a sense. And we’re, you know, in the middle of it there, there were some issues in the beginning due to tornadoes, you know, there were a lot of tornadoes, the touched down in Dallas the month after we closed the deal. And so there was a whole insurance insurance claims process that happened, you know, we’re we’re in the path of the tornado, but obviously, there was some damages. So that kind of pushed off the the kind of renovation plan a little bit. And then you have the and then you have covid happen. So, so know what the eviction moratorium things to that. So it took a little bit more time for this property to get up to where we want to be. So it’s still in process of getting there. But it’s making good headway now.
J Darrin Gross 26:40
In the 111 property, are you on the general side? Or the limited? Or where are you?
Linying Zou 26:44
Well, the GP side, and we’re on various, you know, committees to help with the asset management as well.
J Darrin Gross 26:52
You know, on each of these, how many people are there on the GP side?
Linying Zou 26:58
It depends, I think for, you know, for larger property, because the capital raise is much greater they can be, you know, more groups involved before to smaller deals, you know, it could, it could just be like 4 to 5 GP groups. So it really depends on you know, what resources are needed to come in to help the deal close successfully?
J Darrin Gross 27:22
And what are you? Are you guys looking to possibly be the general or to be a sponsor yourself going forward?
Linying Zou 27:30
Oh, yeah. I mean, that’s really what we’ve been doing this whole whole year is that we’ve been looking to lead our own syndication deal. So we’re actually in the best and final round on the deal today. So I have to feel submit a best and final offer on a on a on a property in Arizona by tomorrow. So that’s what I’m going to do after this call.
J Darrin Gross 27:52
Oh, that’s exciting. Yeah. How large of a property is that?
Linying Zou 27:56
It’s a 63. Unit. And in Arizona, so well, $8 million deal.
J Darrin Gross 28:03
Oh, that’s great. That’s great news for the sponsor on that you found the deal.
Linying Zou 28:07
Yeah, well, we’ll be the lead sponsor on it if we get word deal. So I still early here, you know, five other groups and investment final rounds, very competitive. You know, I’m sure you know, but it’s just very competitive nowadays, you know, inventories very slim and they’re still all buyers out there despite COVID so hopefully, fingers crossed.
J Darrin Gross 28:31
Yeah, I wish you well, with that. I know, you know, the whole COVID realist estate, rubix cube has been kind of a, you know, an ongoing question people have been I think a lot of the conversations that I’ve listened to or been a part of have tried to match up the past market cycle to this market. And I think for a lot of reasons there is no way to compare the two based on just the different factors that fed into this situation you know that in the prior crash the most clearly there was a lot of loose financial dealings as far as your lending was pretty loose and that. And now you’ve got the economy is running pretty good up until the virus hit. You have much more conservative lending and kind of what I’m hearing from people that are in working on deals is that you know the the requirements to close are a little bit more stringent with the the banks wanting you to have higher reserves, etc. But market seems to be holding up I mean, rents are still being for the most part you know, paid collected. So, you know, especially with multifamily, it seems like it’s a still a pretty strong market and and, you know, I think people keep looking for that sign that thing’s going to take a dip. But I don’t know, I’m not not seeing it. I’m not. You know, I think there have been, like, certain markets or certain things like right after to happen, but as long as the the stimulus checks, the economy keeps improving, I think things look pretty good. So,
Linying Zou 30:25
Yeah, I think I think depends, right? I mean, when COVID first happened, everyone was expecting there to be higher delinquencies and low collections. And then, you know, you have the massive stimulus package that came in from the government that really helped. And that, you know, just the expanded employment benefit just ended, you know, and, and then July, so, it’s kind of too early to tell what’s really going to happen, especially if there’s no stimulus that comes again. So that is like one of our greatest concerns, right, is that there’s a extended kind of extended recession and extended high employment. And that’s really going to affect elections and a lot of cities, the eviction moratorium is still in place. So you can’t really evict your tenant if they’re not paying. So I think, you know, if this does go on, for a while, you might see that they were looking for, because you know, some property, some deals are going to be under stress, you know, due to the low collections, if they can meet the debt service ratio, then they’re in trouble. But that’s not going to be in the immediate current, right, there’s always some kind of cushion or reserve in place. But I think we just had to be really cautious about, you know, how we underwriting future deals, and we’re now using conservative assumptions. Because at the end of the day, if this, no one knows where this COVID is gonna go, and you can only make us conservatively can do to, you know, to kind of understand and say, offset the concerns, right,
J Darrin Gross 32:03
Right. No, yeah, I’m kind of curious. You mentioned two things there. One is you have to be conservative with your underwriting based on all the unknowns, but then you mentioned it’s very competitive. Are you finding that the, the competition is equally conservative? Or are there some that are willing to throw caution in the wind? And I guess you’re gonna find out later today or further on? But do you have any kind of sense and talking to the brokers? What your?
Linying Zou 32:33
I think, yeah, I think they’re, we are trying, it’s a delicate balance that you have to walk down the line, right? If you’re too conservative, you’re never gonna win any deals. But at the same time, you know, we definitely encountered deals where we’re like, Wait, how does this even make sense? It makes no sense to us, like, why how this was underwritten to justify this price. So there are definitely groups out there to still doing deals and using, you know, grass assumptions, I think it just, you know, the investors just to be cautious that they trust the GP and they trust the underwriting, because it’s so easy to kind of just go in and say, you know, hey, this, the numbers look really good. I want to invest in this field without understanding all the assumptions that went into it. because everything’s the pro formas is, you know, whatever GP comes up with, right, you can assume a 20% rent growth if you want, and, you know, this can make any deal work. But it just has to make sure that your GP is the way to doing and how the underwriting and they’ve had that kind of, you know, financial background to, to understand, you know, what’s going on and how to offset some of these risks.
J Darrin Gross 33:42
Let me ask you with syndication, I mean, one of the primary goals or the challenges you face is raising capital? How have you gone about building your investor network or creating a pool of investors?
Linying Zou 34:02
So we have various strategies. So I’m on acquisition side, my business partner, Charlie, he’s actually he’s focused on the capital raising. So we actually have various strategies targeting different peers, investors. So you know, obviously, their investors were, you know, basically our friends and family and our close networks. And then there’s tier two. And tier three are basically investors that we see from, you know, podcasts or from, you know, just what content so we have, so, you know, through different different channels, you know, we build a investor base, and then we provide a lot of educational content, through our, you know, monthly newsletter, through our white papers through our website, we have a lot of articles on website as educational. And, you know, we were essentially using both pull and push marketing in a sense, to to generate that kind of a kind of investor interest. I think it’s really important to continue to have to people to and just educate them that syndication is an option because I personally didn’t know syndication existed 10 years ago, and I probably would have gone into it a lot earlier, if I know that this opportunity even was working a second job, or I could have been cheap, I could just be an LP right on the deal. So I think, you know, the fact that not a lot people knew that this opportunity exists is something that we work really hard to bring to others is just this awareness that, you know, just education, if you want, you don’t want to be a landlord, a one to cash flow and somewhere to kind of put your money that’s away from stocks and bonds.
J Darrin Gross 35:37
Right. Now, I think there is a lack of recognition, almost by design, I think the little bit of the history that I’ve come to understand about the stock market and the 401 K’s and, and, you know, the structure that was was more about stocks and bonds, kind of thing, and I think people get trained in that. And that’s kind of you go to work 401k and you just kind of pick pick your fund. And the the, the ability to have it be liquid, you know, is something there’s I know, I’ve talked to some people, they’re like, Well, yeah, but you can’t get your money out as well. But it’s, you know, it is it is a longer term investment. But the returns I mean, the risk, there is risk, but the potential returns are fairly Can I guess it all depends on the operator. But a little bit more of a you can see the path to the the exit you know, and I say it is you got to be careful what you say because it’s always case by case and late the end where you really know but but it’s good. So you’ve got your property you’re in Arizona that you’re in last and final her best and final? And what do you guys feel like? Is the Arizona market you want to really plant a flag and and build? Or is it still just find the find the best asset wherever the best opportunity of?
Linying Zou 37:12
Yeah, I mean, we do have a focus in Arizona right now. I mean, our key strategies has always been inland pro cities, right. And I secondary cities, that’s getting the population income and growth from the coastal cities through the cost of living, better quality of life, etc, etc. So we do you know, so we actually went through a market criteria exercise and, you know, Phoenix, Arizona does fit most of the criterias that we come up with. And so yeah, so we do want to have a focus in Arizona at this time. We really not looking unless like our partners bring us in as like a coach up on a deal in another market? We will we won’t look at any other markets at this time.
J Darrin Gross 38:01
Okay, got it. And are you still in regular contact with the people you met at these conferences? Is that are you? Do you look to them? When you’re trying to raise capital for your? Your own sponsor deals?
Linying Zou 38:17
Yeah, absolutely. I mean, it’s important. I mean, in real estate, or any anything really, it’s important to have partnerships, right, because they compliment you. And, you know, for partners that we found at these conferences or meetups or, you know, people that we know, we actually, you know, have a regular scheduled calls with them to build that relationship, because we think it would look partnerships a long term thing, like we never just go to, like know, someone get to know someone at a conference. And then six months later, we have to say, hey, you want to come in on this deal with us? No, we want to know you. We want to know, if you’re ethically aligned, if you treat your investors like we do. How is your underwriting? Like? How do you, you know, how do you look at these business plans. So I want to make sure that all of our emails align first, and then you know, we start to say, hey, you want you do want to partner on a deeper level. So all of our relationship is, you know, is maintained through, you know, through years, and that’s what we want to do going forward to is just have these long term partnerships that we can, you know, tap into for resources, it’ll help them they need help, and that way we can kind of grow together.
J Darrin Gross 39:29
Oh, that makes a lot of sense, makes a lot of sense. Linying if we could, I’d like to shift gears here for a second. By day, I’m an insurance broker. And I work with clients to assess risk and determine what to do with the risk. And there are three different strategies we typically consider. The first is we look to see if we can avoid the risk. If that’s not an option, we look to see if we can minimize the risk and when neither the avoid normal Minimize strategies will work, we look to see if we can transfer the risk. And that’s what an insurance policy is. And I like to ask my my guests, if they can take a look at their situation and or their investors or clients situation and identify what they consider to be the biggest risk. And for clarity, I’m not necessarily looking for an insurance related answer. But if you’re willing, I’d like to ask you, Linying Zou I’m sorry, Linying Zou, is that right? .
Linying Zou 40:39
J Darrin Gross 40:40
Linying Zou, what is the biggest risk?
Linying Zou 40:48
Well, as owner operator of real estate right now, the biggest risk is a prolonged recession and sustain high unemployment. And if there are no more government stimulus, because that will really affect our collection and, and its collection numbers. So that is really the Biggest Risk.
J Darrin Gross 41:14
Yeah, I think there’s a lot of people that are, like we said, you know, kind of waiting to see what happens here. It does seem Well, I don’t know, election and all that stuff going on right now. It would I would hope that there’s some sort of a an effort to keep things afloat rather than just let it crash. But I guess time will tell. Linying, Where can the listeners go? If they would like to learn more connect with you?
Linying Zou 41:46
So yeah, your listeners can come visit our website at www.akrascapital.com. Akras Capital dot com and where you can just send me an email. at lzou, LZOU@akrascapital.com as well. So we have we have a lot of educational content on our website. And we have a monthly newsletter and well white paper called the new roadmap to financial freedom. If anyone downloaded it, you can find it on our website as well.
J Darrin Gross 42:15
Great Linying, I can’t say thanks enough for taking the time to talk today. I’ve enjoyed our talk and learned a lot. And I hope we can do it again soon.
Linying Zou 42:25
Yeah, thank you.
J Darrin Gross 42:27
All right. For our listeners. If you like this episode, don’t forget to like, share and subscribe. Remember, the more you know, the more you grow? That’s all we’ve got this week. Until next time, thanks for listening to Commercial Real Estate Pro Networks CREPN Radio.
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