Vinney Chopra Archives - J Darrin Gross Podcasts

Multifamily Senior Living with Vinney Chopra – CRE PN #347

Vinney Chopra 0:00

And my senior livings are also going very well. Because what we do is we do all land development things, the ordinance changes and everything. And that gets us the land very cheap. We buy them. But by the time we have done through all the permitting, it’s increased in value by three times already, because we have gotten the permits now to build a senior assisted living. And then the good part is, by the time we are done building it, we start getting residents said, we have 29 residents already given deposits, to move into our apartment complex, brand new. It’s being built right now. So it’s a 2022 construction with everything brand new. And then we have very less deferred maintenance. And there is zero delinquency in this apartment complex because it’s a need driven and, you know, we have to look at the residence they have to show us three years of rent, because usually people stay three years in our facilities.

Announcer 1:11

Welcome to CRE PN Radio for influential commercial real estate professionals who work with investors, buyers and sellers of commercial real estate coast to coast whether you’re an investor, broker, lender, property manager, attorney or accountant we are here to learn from the experts.

J Darrin Gross 1:30

Welcome to Commercial Real Estate Pro Networks, CRE PN Radio. Thanks for joining us. My name is J. Darrin Gross. This is a 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 Vinney Chopra. Vinney is a multifamily syndicator, Senior Living care facility developer, an author, a podcast host, a mentor, family man, he’s a lot of good things. And in just a minute we’re going to speak with any about the opportunities in multifamily and senior living.

But first, a quick reminder, if you like our show, CRE PN Radio, there are a couple things you can do to help us out. You can like, share and subscribe. And while you’re there, we appreciate you leaving a comment. We’d love to hear from our listeners. Also, if you want to see how handsome Our guests are, be sure to check out our YouTube channel. You can find us on YouTube at commercial real estate pro network. And while you’re there, please subscribe. Without on Welcome back returning guests popular Yes, my friend, Vinnie. Welcome back to CRE PN Radio.

Vinney Chopra 2:52

Thank you. Thank you, Darrin, it’s such a pleasure to be back there with you, brother, I maybe during COVID We didn’t get together did.

J Darrin Gross 3:00

We did once or twice. But it’s I mean, it’s I know we’ve talked at least once a year, but I know that it’s been a long time. And it’s time to catch up and see what you’re doing. I know you’ve been I know you’ve been busy, busy, busy. I’ve met some of your your students here locally. Yes. And I know that you’ve been busy selling and buying so it’s a good time to good time to catch up.

Vinney Chopra 3:31

You know, it really is I mean, you know, many times we feel what the market is doing a market is doing but she got to take action and you know, sell some assets at the peak and buy some in good markets and develop some and you know, I’d love to share what’s happening with me. Yeah.

J Darrin Gross 3:50

Yeah. Why don’t you start to you know, tell us what’s what’s been going on here last year. So

Vinney Chopra 3:58

When COVID hit 2020 We always have managed through the zoom and through remotely and everything, meeting with our investors and so on. So that’s when I got more even heavily into senior assisted living developments and I did five syndications one after the other and raised almost $27 million to get this ground up. structions projects and started them in Florida and Virginia. And they are being built in everything. So that’s something that I also bought a hotel with my another partner Hilton Garden Inn, which happened before COVID. Actually, oh my gosh, turn, we closed the deal on December 31 2019. What a perfect timing is it? And then in 2020 to 2020, about April, we said, oh, my gosh, our occupancy has gone down to 22%. And we were ready to pay a mortgage of 15,000. Each partner, you know, because it’s a pretty big deal. Anyway, but then the office staff of the hospitals, three hospitals, nurses and doctors chose our hotel to live in, what, what is the probability of that happening? Look at that. And then our peanuts became millions, because we went from a 6 million we purchased in an auction this hotel, and we are selling it in just three months back, this is 2022. For 11,000,008 50, we are selling, doubling the money doubling the money in that one year, which is very good. And my senior livings are also going very well. Because what we do is we do all land development things, the ordinance changes and everything. And that gets us the land very cheap, we buy them. But by the time we have done to all the permitting, it’s increased in value by three times already. Because we have gotten the permits now to build a senior assisted living, we could sell that land, but we build ourselves with our own GC CINAHL. And my partner has been doing it for over 10 years. So that’s exciting. And then we build it in nine to 12 months, the whole thing. 66,000 square feet to 77,000 square feet of one story with 88 units, add ADA to 93 units, but we are not using any elevators or anything. Because these are 80 years, 200 years, you know, after age group of our residents, seniors who are living in our communities, right? It’s Hampton manor.co is our brand Hampton Manor. And that’s what is exciting. So we are building in Florida, in Virginia, in Michigan, and in in St. Louis. Right, Missouri. And then the good part is, by the time we are done building it, we start getting residents in like the Punta Gorda deal. I’m opening up like April 1, let’s say right, it’s February. So April 1, oh, April Fool’s Day. But we have 29 residents already given deposits, to move into our apartment complex, brand new, it’s being built right now. So it’s a 2022 construction, with everything brand new. And then we have very less deferred maintenance. And there is zero delinquency in this apartment complex, because it’s a need driven. And, you know, we have to look at the residents, they have to show us three years of rent, because usually people stay three years in our facilities. You know, they go to memory care, dementia, you know, which is also part of our division, or they get very sick, then they go to hospice, and they go to rehab centers and all that. So, so this is a new market for me, but it’s very, very satisfying bear market because it’s apartment at its core, but it’s got the, the that feeling of helping and giving the dignity of living for our seniors, you know,

J Darrin Gross 9:02

That’s awesome. So you mentioned the three years of rent up front, is that do they give it to you up front? No. Show you they have that?

Vinney Chopra 9:12

Sure. Just the proof just to prove it. Yeah, yeah. But they only pay month by month by month, you know? Yeah, yeah. No, we don’t take any money upfront, and they don’t have to pay us any money to live in the community either. I know there are other 55 Plus and independent living, you know, places like in California where I live, where you have to pay 300,000 tries to get in to even get in exactly yeah. But in our case states not. Right.

J Darrin Gross 9:41

No, I know that model has changed quite a bit. And I’m guessing it’s kind of territorial where some places are still away and others are more of that but I would I would guess that the the model you’ve got there where it’s more of just like a rent is probably a more agreeable to If people unless the community is something that, that just got a reputation everybody wants in and that’s some sort of historical model kind of thing like that. So, okay, so you, you you’ve built, how many of the senior care facilities do you have is it’s a five, or how many?

Vinney Chopra 10:15

Oh, no, actually, my partner has built over 30. But together five. Okay, I’ve got nine more on the books. So I’ve got 14 coming up here.

J Darrin Gross 10:27

And are the five up and in running now?

Vinney Chopra 10:30

I’ve been in the construction phase.

J Darrin Gross 10:33

Okay. Gotcha, gotcha. So your April one is your opening of the

Vinney Chopra 10:37

first one in Punta, Florida. Right. Right.

J Darrin Gross 10:41

That’s exciting stuff. I mean, that’s, that’s been a couple of years in the works here with Yes, yes. And a little different timeframe with the construction timeline, as opposed to closing on an asset you

Vinney Chopra 10:53

Already built already built? Right? You know, I’ve been chasing C B, B minus B plus A minus all this time, right? You know, but the exciting part is that, you know, I’m not going after working class, I’m still buying multifamily buy. I just bought in Tennessee. I’m buying some more in Florida. But those are 70 million 80 million daily dollar deals. But these ones are brand new, constructed within 17 million. What? 17 million 18 million, I’m able to build these apartment complexes brand new for seniors.

J Darrin Gross 11:31

Yeah, no, that’s, that’s exciting. And I just like the multiple as you’re saying, like, from the time you guys buy the land to when you get the permits, you’ve tripled the value of the land. I mean, and that’s just that’s it land. That’s, that’s impressive. And, you know, it’s funny, because I’ve talked with other developers and stuff have come to recognize that, you know, the original value add. Strategy was developing, right? And when you start a piece of land, and you add value to it, and you totally know more valuable. Well, your hotel sounds like you really, that that one sounds like the one that you really got away with. I mean, not not got away with what really, from I mean, you bought it, I’m assuming it was a fully operational hotel and COVID Yes. And yes, and was occupancy down, like almost nothing, then

Vinney Chopra 12:22

20 22% I think 22% Still, the weekend traffic was there in that town, some big, big business traffic, you’re right. But then we also had a pip in they call it capital improvements in hotels as Pip. And then we were able to change the roof and put some little bit money into it, then we doubled our price, you know, so we are selling it. And we are buying some more actually, I was over there in Gatlinburg, where dolly wood is there. And that’s the number two spot in the whole USA. We had a lot of people come there, you know, for vacation and everything. After Disney World. That’s number two spot and people drive up there. So lots of hotels have 97% occupancy is what they’re looking at different different locations, you know, and then storage units, what when he is getting into storage.

J Darrin Gross 13:16

Storage too? Oh my gosh,

Vinney Chopra 13:19

You know, Vinney is always looking for different ways, right? So I do have my main heart is with multifamily, which I’ll be keep on buying a minus, or, you know, B plus assets, of course, but the compression of the cap rate has really got me thinking, you know, in the year and a half or so, because the C Class B class and a class, the compression of all these cap rates, it comes so close together, that, you know, people are asking a lot more money for their assets. Let’s call a spade a spade, you know, I mean, the deal I borrowed I’m included in that, by the way. The 2020. I bought a deal in Austin, Texas, turn 308 units, right, because my Melbourne property was I’m collecting 98% rents from the engineers. So my engineering mind says Vinnie, where are the other engineers going? Austin, Texas. So I go there, and I come into bested final on a deal with 15 other bidders. And the listing broker knows me what he says Vinnie, I know you. I said, Hi, Michael. How are you? He know, he says I sold you that Country Club property. Nine years back. You were the easiest guy to work with. I said, Michael, I’m so appreciative what you’re saying. When he’s back with more money. Literally, he told the sellers and we had meetings and all they awarded us the deal. My partner and I had Because 34,000,000,007 50 We paid for 308 units in near to the domain in Austin, unheard of totally got a loan from Freddie Mac at 2.69%. What $22 million loan at 2.69. And the broker friend of mine just called me few months back in December, he says, and he’s the president of a brokerage house, very big one. He says, Vinnie, your property’s worth 58 million today.

J Darrin Gross 15:33

Oh, my God,

Vinney Chopra 15:34

Oh my gosh, from 35 million from September of 2020. And this is now January of 2022. So he told me in December in about a year or so, the property went so high. So it’s just mind blowing. Mind blowing?

J Darrin Gross 15:53

You You are definitely the hits, man. I mean, you’ve got the hits. You’ve got, I mean, everything you’ve everything you’ve done. I mean, you know, I think it’s interesting, you know, the the post crash? I mean, you know, everything’s been going up. And there have been plenty of conversations I’ve had with people talking about, you know, are we in the late ending, or whatever. And, yeah, and I keep talking with people that talk about just the data supports the demand for housing, you know, and like you said, if you’re, you found your Melbourne property and the engineers and the demand, and you recommend where and where are the other engineers going? As long as you’re in that? You’re in the the demand? Yes, yes, he gets the key to it. And, you know, the other question, I’m curious, how do you how do you view the cap compression? I mean, you you mentioned the fact that you’re, it makes you question, you know, what is it should do, you know, should stay in should get out, I think but I’ve come to recognize a compressed cap means that there’s Demand. And demand means that there’s somebody behind you waiting, there’s somebody wants that property, there’s somebody wants to be in that market, as opposed to if you get out and it’s a higher cap rate, he may not have so much demand behind you trying to get what you’ve got. Tell me a little bit about your How do you view it,

Vinney Chopra 17:17

I would love to love to mention it, you know, what you’re seeing is so right bit compression of the cap rate, the value of the property has gone up, even the C Class C plus a b minus people are getting so high price, the demand is there, supplies limited, right? Supplies limited demand is there and people can get cheap money. See, that’s the other part in the whole equation, the mod gauge, you could get afford a bigger board gauge with bridge loans and other stuff. So the money is so cheap. But the thing is, it’s the syndicators are in trouble. Because if your cap rate is, let’s say 3.10, and your mod gauge is that 3.5, then where is the, you know, cash flow for the for the for the for the investors. So a lot of syndicators are raising money from what I see in the packets from the investors and then making it as a heat play, and give the same money back as cash flow. I don’t know if it’s a Ponzi scheme or what it is, you know.

J Darrin Gross 18:26

So you’re saying they’re raising more capital than they need to get the deal. But that gives them reserves so they could maintain the yield that they promised?

Vinney Chopra 18:35

Yeah, exactly. And then put value add, and then maybe in a year or two years, the property operations will start giving the kind of returns, you know, so I saw that coming in the last two years. It’s been tough for me to purchase anything, by the way. I only bought one deal last year in 2021. In the multifamily space, right. Then I tended towards senior living more, because I can build everything in 1314 15 million. And it’s a brand new building. And for senior side of the operation, the rents are much higher than the regular rent because we take care of the hotel, I mean restaurant, right? It’s a cook to order three meals and snacks. It’s got, you know, the movie theater, it’s got Spa Salon, it’s got caregiving, prescription medicine, all that stuff. But we charge 4300 Starting as compared to 1300 in a regular apartment. So my $17 million deal brand new is giving us 4 million revenue. So that’s where the differences so can get much high cap rate for building brand new apartments in assisted living. So that’s something engineering mind. I’ve been trying to put this all in equation together. Now my goal is $2 billion in this decade to construct 2 million. 2 billion Yeah, 2 billion. Yeah,

J Darrin Gross 20:10

you’re on a good pace. That’s for sure. So So tell me, you know, we you you started in multifamily actually go way back, you started single family then you went to multifamily syndication, Senior Living hotel. And now storage, what was the appeal of the storage,

Vinney Chopra 20:30

storage, I mean space, I’ve looked into it quite a bit, it’s very, very good. Multi, it’s a multi unit two, if you look at it without tenants tenants up there, but they just come they put their own lock on the storage unit, you know, it says shutter and four walls that solid is very little different maintenance. And it’s totally automated through cameras and everything. And through the software, they get the lock, log in, you know, to go into the gate. And then once they are inside the storage unit, they are able to go to their storage and do this stuff and everything. So the cost of operating the Self Storage Unit is so low. And not only that, more and more I’m doing the research, every zip code has many storage units, you could just say self storage and put the zip code, you will not even believe there are so many because within three miles, everybody, I think how many, four out of 610 families maybe need storage units. And we like abundance, we were to buy stuff and stuff and stuff. And you know, then, you know, move people move and things like storage has been especially very big market and very high good cap rates and everything good returns, you can increase noi i, you know, one of my students actually he’s doing so well. He left his IT job. For storage units, he learned the business in multifamily and raising money. And now he’s big time into storage units. So you know, and that’s where I’m also, you know, I’ll be buying everything. Again, my diversified Fund, which is right now $50 million fund, it’s got four prongs to it. What that means is I buy already built apartments, I do the Senior Living ground ups, I also buy already built senior living by us into fully operational, we buy those also by hotels and storage units. So anybody who gives me quarter million dollars, same money is buying all these things. So they love it because it mitigates the risk, because all these asset classes are there, and also different locations.

J Darrin Gross 22:58

So you’ve definitely kind of muted the risk there by doing that. So So let’s looking forward here many I know when we first talked or talked about almost two years ago, and COVID, we just started and kind of the crystal ball was, you know, ever nobody knew specifically but it was always a question of, you know, vacancy rates at proved not to be an issue with multifamily. With all the money that’s been printed and all of the the demand and just the you know, the capital out there the seeking return be do you see any kind of a softening? Concern? I mean, is there I am, you’re an engineer data man.

Vinney Chopra 23:52

The thing is, we are losing, you know, dollars losing power by putting so much pumping of the money in 2020. By the way, we put I think there was one statistic we put what 60% of the the, you know, meant produce so many trillions of dollars in just 2020 and 2021. To give out to all these people, right? Inflation is at 6.5%. Right now, government is trying to, I think there will be some upward pressure to the interest rate. It is going to be up we’ll be probably in April, I hear point two, five, maybe another one in October. So that is going to put downward pressure on to the valuation because as the interest rate rises, you can afford less of the product. Mortgage is going to go up. Some people were into breach lending, and a lot of people have gone that route in the last couple of years because they can get 80% rather than 70% which the other Fannie Freddie Mac’s were giving a lot of people have gone into bridge lending but then the bridge people will be also looking into How the whole equation is going to work, you know, with these people who are bought to 80%, if the occupancy goes down, we are very close to defaults, you know, as compared to as compared to 60%. You know, LTV, right, so I see a downward pressure coming, you know, but the thing is, you got to be very, very articulate and do assumptions very conservatively, because the rents may not increase that much either. Because if the inflation is high, people have less money, because they’re buying, you know, stuff and eating and gas and everything more money is going there. So they won’t be able to give the higher rents. So, the rent increase will be also very, it may be only 1% increase, or 2% increase, unless you are buying with a big, big gap in the rent differential, you know, already with the value add. So, I think in the crystal ball, nobody’s got a crystal ball. I don’t either, but I really see that the millennials have been taught but three Millennials big time. One is millennial. Yeah, tsunamis, 3d tsunamis, I should have said, one is millennial 74 million of us, you know, Z that may or may senior, you know, but they are the ones who like portability. And they don’t like to buy homes. So the renter, we will becoming a renter nation again, there are so many articles in globe Street in Fortune Magazine, in Forbes magazine, where there is a pent up demand for rents. Immigration tsunami is another one. Because you know, our birth rate is so low in USA, the immigration kind of helps a lot, you know, it’s going to be 441 million population in the next 3040 years. But where is that going to come from, is from immigration, birth, and then seniors, which is 10,000 Baby Boomers turning 65 Every day, until 2020 31 or 2033 10,000, every day getting into senior writers. So that’s 100 million will be seniors in America, never ever before that has happened. So there is a pent up demand for housing for senior living see. So those three tsunamis are going to continue boosting our pressure into rentals. And of course, you know, downsizing by the baby boomers, that’s going to affect also because more single family will be available of course. And then I don’t know about industrial also will be on a good spur up because we have warehouses and all opening up, you know, industrial strip shopping centers are downsizing. We know that very much. Office space is downsizing, but storage units and you know, our I just I have gone. Oh, can you hear me? Okay, from there? Okay, okay. Okay. I usually I do through my microphone. Yes. I had another meeting before this one. So

J Darrin Gross 28:22

Are you have you looked at any industrial? Is anything you’ve looked at?

Vinney Chopra 28:25

No, no, no, I will not be in that. Yeah, I wouldn’t be I think I like to stay the course in multifamily. I love the hotels because it’s multifamily. And you can, you know, look at people have to pay at the counter to stay in the room, you know, and so forth. Storage Unit is also multi family kind of thing, because each one resident owns that space storage unit. And that way, so I’ll stay in the conventional job workers, you know, our multifamily, but I’m loving the retirement communities now. So in other words, I don’t have to change jobs, jobs, jobs where Amazon is gonna open up. Now I can look for demographical numbers, where people want to retire in serene locations with lakes and golf courses and everything. So I’m looking for a piece of land in the neighborhoods where there are no jobs. i That’s why I’m in Florida, and I’ll be in Arizona, all the states because people really need to retire near to their grandchildren. That’s what we are finding. Even from the north cold country. They are moving to their, you know, children and grandchildren so that they could come and celebrate birthdays and, you know, meet with them at the assisted living. That’s the frame. I mean, I’m not into the 55 plus communities or golf courses or condominiums. I’m not in the rehab centers or nursing homes. That’s a business in itself, you know, very big medical equipments and all. I’m only in the safe environment, right in the middle, independent assisted living and memory care. We need no doctors, and only one nurse. And then one chef one, you know, helper, Chef, Deputy chef, we call it and then activities director and all that stuff.

J Darrin Gross 30:26

No. Well, I love the the mix and you know all the success you’ve had and just thank you to be able to take things full cycle I’ll be interested to next time we speak more about how your your senior living, you know, actually to have residents and see what you’ve learned there. Although I’m guessing you’re probably pretty, pretty attuned to that based on your partner having been there so long.

Vinney Chopra 30:54

We are we are and very vertically integrated. In our senior living side also, like ours in the multifamily. We have color in a soul, so many assets. So we have dwindled down in our manpower there in multifamily. We had 135 people full time working in my company, you know, but now, what we are doing is before even the Senior Living opens, during we hired the executive director and leasing agents. So my Punta Gorda, I have 29 deposits already, what 29 seniors who have given me deposit, as soon as I open the door in two months from today, they’ll be coming inside. And I’m going to breakeven, within four months or so I’ll breakeven because, yeah,

J Darrin Gross 31:48

That’s fabulous. Any new construction, the capital improvements, I mean, you’re, there’s no deferred maintenance or anything

Vinney Chopra 31:56

Zero deferred and all brand new appliances, all brand new flooring, brand new roof brand new parking lot. So that saves a lot of money. And then it’s a plus plus luxury living, which I built it from scratch 2022 model. So if I were to buy an asset to give me $4 million revenue, in multifamily, right 4 million to 5 million, let’s say, I may have to pay 40 to 50 million, for a plus plus, I may have to pay 100 million, by the way, you know, 100 million for that asset, which is built brand new, which will give me 5 million revenues. But in this one, I can build it for 17 million to 18 million, and have that revenue of 5 million. big it’s a big equation change.

J Darrin Gross 32:50

Yeah.

Vinney Chopra 32:54

And it saved for for my, my investors, you know, and now the investors are coming Ultra Rich into my fault. We have 430 investors right now. But then the ultra rich are putting 1 million, 1 million, 1 million, 1 million. So in other words, they don’t need cash flow at all. Generally, that’s the beauty of it. So they’re saying we don’t keep the ordinary income, cash flow, you know, which a lot of people pay monthly, and quarterly say I don’t need it, because I’m at 50% bracket, if they give me seven and a half percent, half is gone in the taxes. So just give me capital gain. In three years, when you have done, you know, stay semi stabilized your ground up construction, it’s dirt first year, second year, we build it, and third year we stabilize it, right. So they say just give us the lump sum, or even give us a 1031 option. So I love it, I that’s the key is to just get the money right here. After we have all the permits, and we have a construction loan. And then we gave it two and a half, three years 60% return, let’s say and they can take 60% on that million that 600,000 You know, or they could say Vinnie, put my 1.6 million into your next project 1031 Then they never have to pay tax and we can take it over and over and over again. So it’s a very beautiful model that I have, you know, device now, you know, I’ve been designed it so that people can make 2x Even 2.5x quickly within six years investing in brand new buildings see?

J Darrin Gross 34:42

Yeah, yeah. What is a million your minimum investment in that or is it No,

Vinney Chopra 34:47

no, no, no, no Ultra Rich, we are giving 2.5 250,500 or 1 million. So those are my three levels now. In the ground constructions

J Darrin Gross 34:59

Gottcha. And isn’t that your is that your way of doing those in more returning capital games? Or is it just on the the million plus people, they’re saying I would I don’t want anything just, I mean, okay,

Vinney Chopra 35:11

Even 500,000 people to they say, really, I don’t need to 20,000 you know, each quarter or whatever, right? They say if we can just give you the money, and you show us the progress of everything, you know, that what we have done so far and everything, then in 2.5 to three years, we’ll be able to cash them out, we call them, it’s cashing out, right? You get your full money back, plus the return because we’ll be getting a new loan. See, construction loan is paid out V five,

J Darrin Gross 35:42

Okay. That’s that’s the event that’s giving you that opportunity. Yeah, that’s construction loan, then you’ve got a completed, completed building with occupancy, too. So you’ve got now your occupancy. So you can show revenue. Noi, and you can you can do like just a conventional.

Vinney Chopra 36:00

Exactly, exactly. Yeah, it’s like, building 17 million, it’s worth 24 million. So this is 7 million increase, as I start putting, you know, my tenants in there, and residents, you know, yeah, yeah,

J Darrin Gross 36:14

Right. Now, and in the like said the monthly rents, I mean, the the cap rate, that’s pretty impressive compared to, like you said, how big of a property you’d have to buy in order to get that same kind of level of rents. So totally, totally, definitely impressive stuff. Hey, Vinnie, if we could, I like to ask everybody about risk? And you’ve answered this question multiple times? Yes, I’m kind of curious if if given just your recent experience, in kind of how you’ve changed from, you know, asset classes, or you’ve expanded, I don’t know, you haven’t changed, you’ve just, you’ve added additional asset classes. But I’m wondering if there’s not something that you can, you can look at across the spectrum of what you’ve, you know, what you’ve invested in and just identify what you consider to be the biggest risk, you know, of just the current marketplace? Or, or let me ask you this, what do you see, is the BIGGEST RISK that you face in this marketplace? And just kind of the near future, as you, you know, work with your your investors and trying to totally coach steward for their money?

Vinney Chopra 37:29

Totally, you know, I’m so glad you’re asking that. I’ve raised like, close to 200 million or so. But you’re right, investors want to save money? What if when you die, you know, or something happens to you, right? What what’s the risk involved in that, and then when I took the key man’s insurance, and then our daughter is in it, now, she’ll step up as President, my wife is also injured, our legal, you know, team and everybody, our accounting department itself, the other parties, you know, during the properties we buy, so there is insurance to be gotten at every point of the property, the loss of income insurance, those are the risks also, if some burning, you know, something fire comes, are like that. So, that is other risk. The other risk, which I got hacked, you know, I think I’d like to mention, is the cybersecurity risk. And that’s a big one nowadays, you know, with everything going through, through the computers and everything. So, you know, there are so many different directors, insurance risk is another one. You know, the big thing is contractors who work with us to do capex jobs and everything, we try to save money, but it’s not worth saving money, unless we want to make sure contractors are well bonded in also have, like, you know, millions of dollars of insurance, right, you know, when they come to work at our assets? I don’t know if that’s the question, you were really posing, the biggest risk I find is that you want to do legal way to raise money, and then take care of the investment of the investors. They know, fiduciary responsibilities the right. So as a CEO, I definitely have always felt each asset I bought, I bought 37 Now or something, you know, and I’m on the loan on all 37 Not too many GPS, you know, cold GPS or anything, I don’t believe in that. Maybe just three I have done it, you know, and then with my partner integration now, you know, like that, but other 27 or eight, I was the only person but, you know, the key thing is, you got to mitigate the risk for investors and mitigate the risk for the well being of your company. So you are in the right business. You are there, you know, Because insurance, it’s an investment, I always look at it as an investment. It’s not an expense, because I had lawsuits of $3 million $4 million lawsuits, which I, because of insurance, I walked away with giving zero money, zero money, and they settle the mediated and all that stuff. You know, so when you are in a business entrepreneur, like me and anybody, there are risks involved in people suing you and other stuff like that. So I always feel insurance is an investment, you know, yeah.

J Darrin Gross 40:41

No, I appreciate you sharing that. And I think that, you know, oftentimes the the focus is how to make money on the, you know, the buy and the sell and, and all that and, and the insurance gets looked at is, is more of a just an expense. I mean, one thing as opposed to the protection, you know, it messes up your noi if you have too much or you know, too much insurance expense. So, but the flip side, like you said, is it there’s, you know, the protection you get, and, and when you are facing a claim, that’s when you know, you’ve got some good insurance, so appreciate it, too. So true. So Vinnie, where can listeners go if they’d like to learn more connect with you?

Vinney Chopra 41:23

Oh, my gosh, you know, I’ve got a really great promotion going on right now. I’m so glad you know, I wrote that book, apartment syndication Made Easy, which really helped me a lot to raise money. And I’m giving this book free, by the way to everybody listening or watching as you could go to Vinnie chopra.com That’s my website www. Vinny just like the word v i n e, why not smile, don’t put smile in there but Vinnie chopra.com and slash free book slash free book and I also have Academy I’m also have a $50,000,000.05 or six C fund where I can talk about it and everything it say, you know, for accredited investors only. You know, if you’d like to invest with me, you could come there also, you know, invest with me yes, go to Vinnie Chopra slash invest. Or if you would like to, to learn from me, which I mastermind actually at four o’clock, I have a very good guest speaker, real estate attorney or no CPA coming to my mastermind. I’ve hundreds of students who are doing millions of dollars, I’m so happy, you know, who have taken my teachings. And now they’re doing 200 $300 million portfolios within two years, within two years and three years. It’s amazing. It’s amazing. And it’s not me. It’s them. It’s totally them. I tell them. I say I knew you when you join my academy. You were a mover and shaker. And you know, they’re doing very well.

J Darrin Gross 42:59

It’s great. They were very, I can’t say thanks enough for taking the time to get to connect and talk. It’s always great to hear from you and talk with you. Thank you. Looking forward to it again soon.

Vinney Chopra 43:13

Totally Darrin and if you’re in Florida, love to invite you, brother. You come to Punta Gorda, or Cape Coral on purchasing that one Palm Bay, Sebastian or Carla? I mean, Venice coming you name it. We are all over here.

J Darrin Gross 43:30

We will talk because I got some travels coming up some pesky.

Vinney Chopra 43:36

Thank you. Thanks. All right.

J Darrin Gross 43:38

For our listeners. If you liked 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. CRE PN Radio.

Announcer 43:55

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Multifamily Senior Living Hotels with Vinney Chopra – CRE PN #322

Vinney Chopra 0:00

And we got the deal and we just be a tad higher than what other people were paying with found out and also hard money day one. So those are great deals but they’re very hard to find. And they were fully renovated units the seller had put in and brand new roofs and brand new parking lot everything so we paid a little bit higher, but we have more potential to increase the rents so anybody really looking into this market? They need to you know, underwriter, the right lender, right. But look for the best nugget don’t jump into it. If you don’t have a strong business plan.

Announcer 0:43

J Darrin Gross 1:03

Welcome to Commercial Real Estate Pro Networks, CRE PN 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 a returning guest and a favorite. His name is Vinny Chopra. Vinnie is a multifamily syndicator, Senior Living care facility developer, and also a mentor for investors and an author and a podcast host and on and on and on. And he’s multi talented. And in just a minute we’re gonna speak with Vinny about the opportunities in multifamily and also senior living. But first, a quick reminder, if you like our show, CRE PN Radio, there’s a couple things you can do to help you can always like, share, and subscribe. And also we’d love to hear from you. Leave a comment. Also, if you want to see how handsome our guests are, be sure to check out our YouTube channel. You can find us on youtube at commercial real estate pro network. And while you’re there, please subscribe. With that, I want to welcome my guest, Vinny, welcome back to CRE PN Radio.

Vinney Chopra 2:23

Thank you. Thank you. It’s such a pleasure to be back again, Darrin and we have been together many times on the many times.

J Darrin Gross 2:31

Yeah, there’s there’s a whole list of of interviews we’ve done that are on if you go to the YouTube channel, and you there’s an actual list of of interviews we’ve done there. So and we’ve covered, you know, a spectrum of topics, and I always appreciate the opportunity to talk with you. But it’s been a little while since we’ve talked last I think last time we talked was kind of the front end of COVID. And I know at the time you were shifting from not shifting from but incorporating more you were growing. Instead of just multifamily. You were getting into the senior living and you know, branded that and developing and, and you were as always excited and smiling, happy and things were going well. And so before we jump into it, maybe just a brief kind of a an introduction, if you could tell just to listeners, kind of your your two men and who you are and in your background a little bit.

Vinney Chopra 3:31

Sure sure that, you know, I came from India with $7 a month people know, and I’m a mechanical engineer. I came here to do my MBA in marketing. And that just sales and marketing got me so fired up. I never looked back. So I’ve been in that business for a long time, have been an investor for four years now in two single family homes and about 15 years in multifamily. So that has been the big crust of my career with the real estate, commercial and then 34 syndications complete syndications. And little over 4700 units, and about half a billion in you know, portfolio with a u m, we’re on the single maybe one or two times I had partners, but most of the time I’m the principal and the general partner in the deal, you know, and yeah, that’s a little bit about me. I know I’m very fired up about multifamily like everybody is and millennials as you know, they definitely we need multifamily. We will need even the offices now. With COVID or after COVID in a lot of people are working from home. So two bedroom and office three bedroom in our office, you know, we’ll be probably developers will be building. Second one is the integration which we haven’t Seeing that much influx in the COVID. But that’s another one where the rental units are needed. The third is my most favorite one, which is the tsunami, silver tsunami 10,000. Baby Boomers are turning 65 every night in USA. So they had like 54 point 7,000,065 plus right now, in the next 3035 years, they’ll be 100 million. Oh my gosh. So that’s a big, big number. And they’ll be a huge shortage for the senior living, independent living and all that. And then assisted living and memory care is where we have honed in, in our companies, I found a great partner shade and Ron from Pakistan, who actually have been building these assisted livings. And here I was thinking, How can I get into it? So now we are joined at the hip, you know, so we are building them? Five to seven acre of land with a lot of great luxury, amenities and all that. So that’s a little bit about me. Yeah.

J Darrin Gross 6:13

No, that’s awesome. Well, let’s talk just a little bit. I think the first thing I wanted to congratulate you on is 34 syndications that you’ve gone full cycle on Is that right?

Vinney Chopra 6:23

Well, I have sold 25 of those already. So that’s full cycle on 25. And one more, I’m selling now 26. And then we’ll be left with quite a bit bigger ones like 52 million one, 35 million. We just bought a 35 million one in Austin, Texas, which is a very big for us because we caught it at 113,000 per door. Somehow, last September, and now the vicinity, the neighborhood is going to be at 153 a door.

J Darrin Gross 7:05

Well, you didn’t do anything you haven’t applied your Midas touch or anything.

Vinney Chopra 7:10

I don’t know what happened there. Oh, my gosh, me increased value from 35 to almost 47 million, you know, in just one year, just in one year.

J Darrin Gross 7:21

That’s terrific. That’s terrific.

Vinney Chopra 7:24

Austin is on fire, as you know, you know? Yeah.

J Darrin Gross 7:27

Yeah, no, definitely the Sunbelt states. I mean, you know, Texas and Florida and Arizona. I talked to other people about and I mean, it’s all kind of a tough to lose in those states. I think just based on people are moving there. You cited the millennials, the immigration, United seniors look to the sun sunbelt states for for retirement. So let me ask you so that you’ve been doing this now for 15 years? Yeah, there’s definitely been a little bit of a change in the climate I mean, as far as just the the workplace and just the way we live with COVID and stuff. In fact, I think cameras Last time we talked but I can remember it was just kind of the some of the protocols that were being instituted because it was still kind of a not an interaction kind of thing. But it’s more about how to create barrier and space between people and all that I think we’re we’re now a little bit beyond that. But But you indicated just even in kind of the intro here about millennials looking for you know, a bedroom or a workspace at home. So to end it is you look at your portfolio in what you have had versus what you have or may purchase in the future will that change some of your thoughts or

Vinney Chopra 8:55

Dramatically there and you know, I mean, I have been buying c c plus b minus older properties. Now we are buying more newer properties, which is good and also with the business plan to you know, renovate them to like I just found a day in Tennessee. I flew there 15 bidders were there, and we got the deal. And we just paid tad higher than what other people were paying we found out and also hard money day one. So those are great deals but they are very hard to find. And they were fully renovated units the seller had put in and brand new roofs and brand new parking lot everything so we paid a little bit higher, but we have more potential to increase the rents. So anybody really looking into this market. They need to you know, underwriter, the right lender, right. But look for the best nugget don’t jump into it. If you don’t have a strong business plan. You know, so this property actually, they renovated it. But the rents are seven to $800. Lower. What? Wow, I live it next property over in Tennessee, when I’m buying, it’s like 678 $100 lower rent in this property because the seller is a flipper, so they just want you to renovate and keep the rents low, so that the occupancy goes higher, you know, so we’d be able to either jump in, and we’ll educate, you know, that residents that they have been paying so low. And it’s all bills paid, which we never do. Millennials live there. But they are just not shown that, you know, hey, you have to pay for water, and gas and trash and Internet, and cable. We just kind of jumbled it all together in one price, you know, anyway.

J Darrin Gross 11:00

But that sounds like a home run just based

Vinney Chopra 11:03

on like your home run. Right? excited about it? Yeah.

J Darrin Gross 11:08

Because I think one of the things that I always appreciate in talking with you, and we’ve had the conversation about capital improvements, yes. You know, and like you just mentioned, having a plan, you know, having a business plan and then implementing that so that you can get the higher rents the higher noi and the higher valuation so that you can, whether you actually refinance or whatever, you’ve got that that built in there. On your on the properties that you I mean, this This one sounds like it was fairly well renovated. So it should be I would think, a faster upgrade as far as your your noi, is it gonna be easier way to

Vinney Chopra 11:48

lease Aaron really increase in rents, of course. But we also found there was a duplex on the property, which was not counted in the rent roll. So when we went to tour it, and we found that it could be a big parcel where we could build a townhouse is also somewhat demolish that the duplex and be four Plex and four Plex, eight of them, which will rent for 2200 a month, he found out in the door. Yeah. 22 have more than one.

J Darrin Gross 12:25

Yeah, per door. Wow. That’s your door. Yeah. And the the there was no accounting for those

Vinney Chopra 12:32

units when they had said 109 units. It’s smaller property than what I’m used to purchasing. But it was such a good deal. We had to take it, you know, it was 107. But the two units were not shown on the rent roll. They were like we can break in, but they were duplex. So we are glad that nobody lives there. And we’ll just demolish them. And then we’ll build a brand new, you know, Class A, with the amenities and all townhouses. Yeah,

J Darrin Gross 13:01

No, that’s, that’s great. And now that you’ve done so much developing, I’m guessing that that’s, that is kind of second nature to you is it

Vinney Chopra 13:09

You know it is. And over the years, I have done some really heavy lifting, with some burns units I bought and renovations keep on going, you know, all over the foundation challenges and roofs, lakes, and you name it right, you know, so it’s quite okay for us. And then with the senior assisted living, where our whole game plan is to buy the land, and then go through the ordinance changes, get the permits, and then build on it. So we are the developers, we buy the land and we do all the ordinance changes, and then infrastructure, and then we manage them also. So it’s a whole cycle of two years, two years it takes us but you know, that’s it’s something which is unique because in our assisted living and memory care division, it’s one story only. And there are three to six courtyards are there where our seniors can go out and have exercises and putting green and waterfalls and swimming pools and all but then inside the put spars, salons, billiard rooms, exercise rooms, then library and also the movie theater inside plus the dining halls. So it’s a very nice luxury, you know, community that we build. That’s what the Hampton Manor is of a brand that we are hopefully building we’re building nine locations right now. We have built 23 already.

J Darrin Gross 14:51

So my goodness, you’ve built 23

Vinney Chopra 14:55

Had built 23 already. And now we are building nine locations In just Florida alone,

J Darrin Gross 15:02

Oh, my goodness. I knew I knew that you were busy. But that’s that’s a plateful and then Maura. Great. So the the, I wanted to ask you just a little bit about we talked a little bit about COVID kind of shaping the marketplace in multifamily. Let me ask you just about the senior market. You know, knowing that originally the the senior population was considered to be a higher risk. And now through vaccinations, it appears to be relatively relatively under controllers talk about boosters, net, but I, I have not paid a great deal of attention. But I have I read the news occasionally and see that, you know, by and large, the number of persons that are the people that are most affected by COVID, or any of the variants appear to be the unvaccinated and I’m not trying to make a debate about or whatever, but I’m just, I’m just kind of curious, based on that. Are you seeing any kind of deviation from what you planned for the seniors? Or is it or is that that I mean, just the sheer demand and the numbers you talked about, continue to fuel that and without, without any kind of,

Vinney Chopra 16:16

You know, good point, here, and what we found was like, we locked down pretty fast. If I recall, you know, when we talked last in March or April, and 2020. We locked down, we didn’t have a single debt, you know, and you know, our senior assisted livings, we have 14 of them, we are managing still. So they are like, you know, 75 203 years of age, you know, seniors out there, so nobody, you know, contracted or died or anything. I know nursing homes were more prone to a lot more deaths came from there. But now with double vaccination, the market has opened up opened up quite a bit, actually, we get a lot of calls that request to look into like Punta Gorda, I think we have 17 deposits already. And we are 70% only built. So a lot of people are calling us to bring their mom and dad, when we are done, we open the gates, then we would like to be 50% occupied. It’s a 88 units. I think we beat Ada to 92. No love, no bigger. No two story, no three story never ever really beat that. And the other good part is that we want a quality of life. So five to seven acres of land, minimum so that they can really stretch out, you know, and have all these great immunities there. Yeah. So COVID has not hurt. Well, it did hurt last year. But it’s opening up and speaking some of our new developments won’t be opening until the fall of 2023. So we feel even the effect will be even less, you know, then. Right. Right. And especially because we don’t have the distances, and we don’t have to elevators in our assisted livings and also the space is so hot, you know, SP a pretty large, so distancing is very easy for us right to take care of all that right. Yeah.

J Darrin Gross 18:29

No, that’s, that’s great. I’m glad to hear that. Because, again, you know, I think on the front end of COVID there were a lot of questions. Yeah. What what was going to happen? And how are things going to be affected? And, and glad to hear that, you know, your your outlook is, you know, the minor changes with the multifamily. But as far as the senior living it looks like that’s still full throttle. Yeah, you know, go fast. market their brand. Let me ask you this. So the the, do you see any changes in the marketplace? I mean, you cited, you know, the the millennials and the immigration and the seniors? I mean, those are all expanding populations. Is there anything based on the work from home? I know, in the past, we’ve talked about, you know, do all of the, the, you know, research on basically the demographics and make sure there’s a growing community and that there are jobs coming there. Has Have you seen any of the work from home change that dynamic at all? Are you able to pinpoint anything like that?

Vinney Chopra 19:37

You know, that’s a very good point. What you just mentioned actually, you’re right, we’re finding lot of people are enjoying the lifestyle of coming out of the bigger MSS. As you know, big, big cities and going into suburb, something we live in the Bay Area, you know, is the area I cannot believe how the prices have shot up, you know, in the suburbs. I’m, like 30 miles away from San Francisco, where I live in Danville. But you’re right, a lot of people are also moving to other places where their family is their spouses from and they would like, you know, their kids to grow up there. Right. You know, so a lot more flexibilities there. But at the same token, I feel those jobs which are more remote are tech oriented. Most of the time service you have to be where the services right, so Austin, we are really big Tennessee, we are very big knocks for you. I’m very big on checking the love course. And then Atlanta is just growing like crazy crazy in every direction. Florida be a very big, you know, and Texas. I mean, even Houston. Oh my gosh, so many great opportunities are there in San Antonio Houston, and Fort Worth and Dallas. Austin. So I know I haven’t bought in Arizona that much. But I know we’ve been building senior assisted living has been moving from east coast to the west coast. Got a big claim to have nine more years this decade for building $2 billion worth. I know that’s a big goal. But we are going for it. Yeah,

J Darrin Gross 21:22

That’s great. And I know on the the multifamily is when you syndicate those, you you raise the capital, exercise your business plan, exit distribute the the proceeds. Do most of your investors. Are they signing up for the next one? Or Hi, have you have you had you know more money than you know what to do with or I mean, I know I want to talk to you for a few minutes to raise millions of dollars.

Vinney Chopra 21:50

26 million last year, we raised 26 million. And this year, what I did was actually to be truthful. I designed a fund. So this year, I launched a fund already, it’s a $50 million fund, which I can buy about 200 million or close to that, you know, product. But what I did was in this fund, there are four pronged attack to mitigate the risk. Many time syndicators like me and others have one property, and they do a fun to raise money for that particular property. If the property does well, our investors do good. If it doesn’t do well, then they go down with the same one asset. So in this fund, it’s a 506 C, which is my first one, which is accredited investors only. But we can advertise we can talk about it and everything. But what are the four different ways I invest the money from the fund, one is multifamily, which is B class A B plus. So So that’s number one. Second one is giving the equity from the fund to start the senior assisted living constructions. So when I used to raise that separately, now I raise it in the fund and then do those. Then the third thing is when we build the senior assisted livings, we are buying them. Once they get close to stabilization, then we are purchasing them into the fund also, like we are buying right now 17 million, it’s worth about 22 million easy. Once we take the 45% I think it’s 43% occupancy right now, assisted senior living that we built in Cape corral. We are buying it for 17 million, cashing out the investors brought the money before and then we’re going to keep it for seven to 10 years. So that’s going to be the third prong and the fourth one is hotels. So in the find the money, we can be put into four different plates. So I looked at it as a multifamily. The resident has to pay upfront, right in though, you know, in the counter to go upstairs and sleep one night or four nights or whatever. So it’s almost like a apartment. I consider it as an apartment. But the IRR are very high. you know on the hotel. Yeah.

J Darrin Gross 24:36

On the hotels. Are you buying existing Are you developing those or?

Vinney Chopra 24:41

We are buying existing it we just bought one with my major partners. And we lucked out actually we bought it just before COVID we didn’t even know it. We bought in an auction Hilton Garden Inn in McAllen, Texas. For I think 6 million. We bought it for and All cash, right. But then the medical staff and nurses chose our hotel to live in. What are the chances of that? So however whole 2020 was in black, and Crawford, and the value went to the refinance state during COVID. And it’s worth 1 million now. What?

J Darrin Gross 25:26

Doubled your money? Well, the good news is Oh, I mean, it just follows you. That’s, that’s I mean, it’s, you know, I was wondering about that, just the hotels, just how hard they were hit. Just the whole COVID. Like thing with traveling that I know.

Vinney Chopra 25:47

No, we were ready to pay what key from our own pocket every month, right? When we closed it on December 31. In February, we were 16%. occupied. It was so low, right? But then bam, we got some contracts coming in, and then nurses and doctors and local authority, no, we were average to things. It’s 72%, we average occupancy.

J Darrin Gross 26:16

That’s great. Let me ask you something. You know, I find a lot of people and I think myself tend to think in this way. It’s just kind of stay in a lane. You know, you, you you started off and you started off in single family a long time ago, but you’ve been in multifamily and been very successful in multifamily. And you’re, you know, you were aware of and I’m curious about and researching about the the senior living and found your partner and and, you know, got into that the hotels Now, how do you in your mind reconcile? Or is? Or do you see it all the same? It’s just a different silo? How do you? Do you look at it any differently? Or is it just all a business?

Vinney Chopra 26:59

You know, what you what you said is so right Darrin, and I don’t know ABC about hotel to be truthful. But what happened was, I found some other great partners, but they seek out to me kind of thing. And they are really great at it, how to underwrite it, what to look for. And, you know, one of the partner is also very much hands on, on a weekly basis. And I also get into the meetings now. But we have hated people managing the asset. See, you have to have Marriott is another one we are purchasing, looking into that are lucky into Marriott salon. But with tier one we like to get for the mid tier, but the profit, the cost, segregation is amazing. The tax write offs are amazing. So a lot of high net worth people love to invest in hotels. So that’s how I kind of, you know, again, with law of attraction. These my other partners are very strong in hotels, and I’m also learning and I’ll be able to work with them.

J Darrin Gross 28:06

Yeah, yeah, well, I would think that your success and the other, you know, the multifamily and just the, you know, the networking you’ve done and the ability to raise capital would would automatically present additional opportunities to you based on on on that. And, you know, kudos to you for all your success and your, you know, the, the energy you bring to every interaction. And I wanted to ask you to a little bit about your coaching. You know, the the recently I think last week or two weeks ago, I was having coffee, and one of the guys I was talking with, he’s working with you, and I am talking to anyone out there, I need to reach out to him. So tell me about that. Because I know the you know, you’ve authored a couple of books. And I know that you’ve you’ve done coaching, but it hasn’t been something that you’ve been really, you know, when we’ve talked you really tooted your horn on as much as it was something that you know, you’re doing. Tell me a little bit about your mentors. Yeah,

Vinney Chopra 29:03

I would love to love to Yeah, I started my multifamily. academy.com is my company. And actually I A lot of students were asking me a lot of questions. And I was answering them the same way, again, and again and again. Then we said, why don’t I just keep on recording all my answers. And that’s how it started. And I have, I think 1000 lectures now. He had me, it’s online, people you get to learn everything and everything, what they can do what I’m doing, to go into online for 20 $500 only, because I make my money in buying and selling and syndicating I just want to you know, give myself back, you know, to the community at very low price. I’m even coming out with a new course now for 997 the whole thing and they get everything on a silver platter, all my worksheets, all my PowerPoints, you name it underwriting tools, everything included. And then I do 70 $500 group coaching, I do that. So I have some students in there where I teach myself, I have no other coaches, I teach every Wednesday actually, like, after this call, I’ll be meeting with them at four to 545. Every week, I love that time to do deal analysis and going over their questions and having other students share their successes. And it’s a motivation, every week motivation, you know, moving the needle, I call it, and then I have personal coaching. So I have five students only, and they pay 25 to 35,000. For me to teach them and get them on a very quick path. So that’s my coaching program. Yeah.

J Darrin Gross 30:52

Well, I you know, you’d certainly be one to a mentor. I mean, just the all the conversations we’ve had the experience that I know you have, I mean, you can certainly walk the talk. And that’s, that’s, I would think anybody seeking that help would be in good hands to, to work with you there. So appreciate that. So Vinnie, let me ask you that question. I’ve asked you a couple of times. And it’s one that I like to ask all my guests. And I would ask that in in this time that you kind of look at it from just kind of more of a broader picture based on and I’ll let you frame and I really want to, but just knowing all the experience you’ve had, and kind of as you look forward and stuff, the questions about risk, you know, the biggest risk, and, you know, I, as an insurance broker, always work with my clients to just assess risk, you know, what’s the, can we avoid it? Can we minimize it? If we can’t do either of those? Can we transfer it? And that’s where the insurance comes in. And if if you’re looking at your situation, and kind of the way you see the different silos that you’re operating in, and kind of the economy and the governmental, etc. Vinney, what do you see is the biggest risk?

Vinney Chopra 32:17

Wow, that’s a very good question. You know, they’re not see that, as a businessman, any intrapreneur should always, always always get the insurance, you know, to come back the risk, because we syndicators are using other people’s money, you know, to get into LLCs, and buying these properties and all that, if there is a slip and fall, or if the contractor came on the property, not properly insured. I just believe that we need to have the highest amount of insurance and umbrella insurance at the same time to directors insurance, I’ve had that in the past cyber insurance I’ve had that. I’ve been, you know, before big lawsuits, but I just kind of walked away from them, because I had people like you, you know, who really took care of and they were able to write good policies. Were they settling mediated and settled? You know, with the, with the plaintiffs, I think, right, you know, defendants via the defendants, right, ya know, all those things happen in life. So we should really always be looking around us what can go wrong, right. Even in the due diligence side, when you said, you know, risk involved, a lot of risk is there because we get the key to the property, then it’s our choice. I mean, it’s our baby, no matter what we did. So we need to really mitigate the risk, I call it you know, by taking proper measures about like, I talked about, like sewer lines, running the cameras through, and then, you know, foundation people, termite people to come digging deeper into, you know, if there is some termite and mold and all that stuff. So, no, those risks are there. As business people, we need to, it’s the small amount we pay, it’s an investment. That’s what I say. I mean, one time in my life, I was paying 1.2 million 1.2 million insurance premiums for by so many properties. Yeah, yeah. You know, so that way, it was definitely definitely needed help, you know. So the risk factor is very much there, and especially for us syndicators, and we need to really listen to people like you. Definitely.

J Darrin Gross 34:44

I appreciate you reiterating that and I’m just kind of curious too, is you have expanded your circle, do you feel like any of your risk have, have, have you see any risk that have grown? I mean, do you feel like there’s more risk when you get something new that you’re not as familiar with, like maybe the, the multifamily now that you’ve done 25 deals full cycle, I’m guessing you could pretty well do that in your sleep based on just you know, what you need to do and a lot of things you’ve probably seen, but as you go into, like, now you’re talking about hotels?

Vinney Chopra 35:18

You’re right. You know, I think, again, the biggest thing is like in hotels, again, a lot of people are coming, adhering to the rules and regulations, you know, especially in COVID. And all we had to run proper businesses, because otherwise, one bad COVID a positive right can really spoil the whole thing. So you’re right, the risks are there, even in the assisted living now see, we are dealing with much older population. And they have entrusted their health to us. So we want to make sure that our caregivers are well taken care of, and the nurses and everybody you know, and the chefs who are preparing the food, all those things, right? So you’re right, I mean, these things are something many times we don’t look at it steer, you know, right into it, but we need to look at Okay, in whatever industry we are, what are the different insurances, and then choose pick and choose, you know, which ones we should pay the premium? and have it? I mean, I have always had a 210 million dollar a great loss on every asset. Every single one I got 34 right. So the key thing is you got to be properly insured. You gotta be you got to, you know, hopefully, you’re happy to use it. But But when you need it, like I just settled the case for half a week. You know, somebody shot one of the tenant in the leg kind of thing, right? And these people chased him from hamburger place. Something went wrong over there, but then he came into the apartment complex and all that stuff. So, yeah,

J Darrin Gross 37:08

Yeah, no, it’s it. There are some, you know, sad, crazy times out there if you put too far I mean, between all the the civil unrest and yeah, it’s, it’s I mean, there’s a lot of optimism lie a lot of reasons to be optimistic about what’s called Yes. Certainly some some troubles if you look for him, and well, yeah, no, definitely, definitely. I don’t say so. Yeah. So, Vinney, where can listeners go if they’d like to learn more connect with you?

Vinney Chopra 37:43

Sure. They’re interacting. My website is Vinneychopra.com. v i n n e y c h o p r a dot com. And they can always you know, I’m on Instagram, Twitter, YouTube, also now Vinny chopra.com. And then just Google me You can be there. My two books are there on Amazon. Apartment Syndication Made Easy. Then Positivity Brings Profitability. My third book is coming out, which is on Senior Living Investing Made Easy. So I’m really very bullish on senior housing. I want to give back to the community. I’m a senior myself, I’ll be 70 years next year. So I really feel that you know, I want to do more and more fellow citizens. Yeah.

J Darrin Gross 38:33

Awesome. Very, it’s always a joy to speak with you. I’m so glad we’re able to do this today and catch up. And I wish you continued success and great health.

Vinney Chopra 38:46

Now Same to you there. And it’s such a pleasure to be with you. And God bless you and keep up the great work and we’ll see each other’s their time. Yeah,

J Darrin Gross 38:56

I look forward to thank you. They are in for our listeners. If you liked 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. CRE PN Radio.

Announcer 39:17

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Senior Living Multifamily with Vinney Chopra – CRE PN #288

Vinney Chopra 0:00

My investors in multifamily for the last 13 years have been wanting to get cash flow from day one, I close on the deal, and I start paying them cash flow every quarter from the day of the closing. Right? So I should come up with a better plan to tell them first year it’s dirt. So I’ve been using the word Dirt, dirt, dirt. And they understand that and say no, don’t worry about it, because we give you a monthly review of what’s happening with your money with the ground being broken and bulldozers and drone footage of you know foundation and everything. So we got it all planned, where people can go log into their our Appfolio website, they could see everything happening with their money. Then second year, they get not 7% return, giving them 10% or 11% return cash flow because we build it in 12 months!

Announcer 1:03

Welcome to CRE PN Radio for influential commercial real estate professionals who work with investors buyers and sellers of commercial real estate coast to coast . Whether you’re an investor, broker, lender, property manager, attorney or accountant We’re here to learn from experts.

J Darrin Gross 1:23

Welcome to Commercial Real Estate Pro Networks CRE PN 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 your experience and insight to help you grow your real estate portfolio.

Today, my guest is returning guest Vinney Chopra. Vinney is a real estate investor. He’s a syndicator. He’s an author. He’s gone full cycle on multiple syndications. And in just a few minutes, we’re going to talk to him about the new venture he’s invested in, which is the senior multifamily living and why Senior Living multifamily is so essential. But first, if you like our show, there’s a couple things you can do to help. One you can like, share and subscribe to our podcast. And if you’re inclined, please consider leaving a comment we’d love to hear from our listeners. Also, if you’d like to see how handsome 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 while you’re there, please subscribe. With that on welcome back my guest, Vinney, welcome back to CRE PN Radio.

Vinney Chopra 2:48

Thank you. Thank you so much. Darrin, it’s such a pleasure. I’m so tickled. We are on the show again. And thank you for inviting me. I know you have done quite a few really great shows last year also we did it and even a year before. I’m back with you. I’m so glad. Yes.

J Darrin Gross 3:05

And we have actually if the listeners or viewers are interested if they go to YouTube, there’s actually I’ve got a playlist that’s got all the Vinney interviews we’ve done and we’ve covered a number of topics over the years. We’ve we’ve gotten into multiple topics on multifamily. We’ve done how the numbers work syndication, buy sell agreements. Operation I think the list is extensive. And it’s it’s definitely an educational platform. I encourage anybody to go check out. But today you know, you’ve been very, very busy. I mean, we were just talking before I push the record button. Here we are. We’re recording this today. It’s It’s October 14 2020. We all know that 2020 has been a humdinger of a year as far as all the challenges with COVID in that. But you while sitting in your your home area. It’s your I mean, you virtually not traveled at all,

Vinney Chopra 4:09

Not at all, zero.

J Darrin Gross 4:10

But right before COVID You are like a globetrotter you were like I mean, I remember seeing pictures all over the globe. You were weren’t you? Weren’t you traveling all over?

Vinney Chopra 4:20

We were in Ecuador. You’re right Darrin, and also Amazon and Galapagos. And thank goodness, my wife and I, we love to travel, we had six trips planned this year yet, you know, after our Amazon travels, because it’s our 40th wedding anniversary. So we started planning this year to be the best year in travel. every two months we were going to be gone away, right? But we did get one trip in and as soon as we came back, we had to cancel them because of COVID-19. But you know, my life. I always believe whatever is happening, it’s going to happen. So never fret about it. Never think it’s second you know that What if? You know, so even our children were going to go with us this year Neal and Monica in several other trips, and we are paid a lot of monies and everything, but you know what, we’ll do it next year or the year after watching who cares, right? So right, that attitude that, you know, hey, we are here, let’s make the best of it. That’s what it really got. Well, and I, you know, started two new companies. I also did the branding company, and then we got the hospitality and then the senior living, which we’re going to talk about it today.

J Darrin Gross 5:33

Yeah, I was gonna say, just but you know, while maybe the world has been in a little bit of a pause, you’ve had the accelerator to the floor. I mean, you’ve literally been tearing it up. And let’s talk a little bit about what you’ve done here. You mentioned you you’ve done how many syndications Have you done. This year,

Vinney Chopra 5:52

I’ve done 33 so far. So I did 28 as of last December, many of you might know, then I did one more just recently bought a $35 million deal in Austin, which was very good 308 units with my partner, actually, the son and his team, I love to work with them were in part 50 million last year, and then 35 million in December, but then our new partner Shahe them wrong, who is a very good partner and in senior living, that we have been talking and now we are drilling, you know together. So I did four syndication for that. So that’s why it is 29 plus four is 33 syndications.

J Darrin Gross 6:38

Wow. So let’s talk about your senior living. What you’re doing in senior living?

Vinney Chopra 6:44

Surely, I didn’t actually, I’ve been thinking about senior living for the last three years, three years, because when I read lots of articles, I read a lot. By the way, I listened a lot, read a lot. Look at where the trends are the big ship book game, and I started reading it, how everything is merging down south into, you know, Florida’s and Arizona’s how the population there is silver tsunami going through USA, and the world, which really caught my attention is 10,000. Baby Boomers like me, are turning 65 every midnight, every midnight 10,000 of them. And that’s like almost 60 some million, you know, a baby boomer at 65 Plus, right now, in 30 years, they’ll be hundred million. Hold on. So everybody’s aging in USA now. 85. and above. That’s another statistic, almost five or 6 million are right now. They got to grow to 20 million.

J Darrin Gross 7:52

So if you’re saying there’ll be 20,000,that are 85

Vinney Chopra 7:55

85 plus 85 Plus!

J Darrin Gross 7:59

Wow!

Vinney Chopra 7:59

20 million in the next 30-40 years. I mean, it’s tremendous that it’s so much demand is going to be there in real estate. See, we are in real estate. So we need to really look into the forward looking forward looking. Where is the demand coming? Where are the demographic shifts happening? Why you know we should be in this market is because they be so much shortage of housing in the senior with the 85 plus and 75 plus and 65 plus. So that’s why we decided I’ve been sending messages out in the universe. Let’s just say that, I believe in law of attraction, the secret and everything manifestation. And then I find John Lewis and my good buddy, and he’s brother of Joshua Roosen, and he joined my VP of the Academy. And I said, John, I really want to get into senior living. He says, Vinney, you’re going to talk to my buddy, I went to school with, Shahid Kahn. He’s been building senior living in luxury kind for the last 10 years. I said what? Here I never knew Shahid at all, he comes in my lap, and we do few zooms. And his passion is to build the best of the best of the best for such a reasonable price. And look at that. rest is history. So we have started already within few months 100 million dollar worth of senior living ground up hundred million

J Darrin Gross 9:37

Ground up. So this is this is a little different than just buying something that is existing product and and adding value to it. You’re starting from raw this piece of dirt and you’re going through the whole process

You saw. So right there. So essentially what I’m learning right now and I’m a student of anything, I mean, I believe believe that, you know, when I study when I don’t learn, I die. I that’s my thinking is I’m you know, so essentially you’re right. It’s like buying a land trust a lot of studies, find out where the needs will be where seniors are going, what’s the population of 85 plus 80-85? Then find out what’s out there in that marketplace, right, like market comparison, very similar multifamily. Like I buy those, right. But the biggest thing I love in this market is I don’t have to go out to jobs, jobs jobs, which I’ve been chasing for 14 years. If right whose job I have to give concessions or delinquencies, I mean, we have turnover a lot of things that are happening right. But in the assisted living when we build it ground up, it’s Class A plus. It has zero deferred maintenance, it got everything brand new appliances, everything new air conditioning, youJunaid right. And no turnover, no delinquency and no concessions. And the rents are four times Hold on. So expenses there because we have a commercial kitchen in all our facilities. We have two chefs, we have Restaurant Style dining restaurant style, five star restaurant, in the place in the place. We have movie theaters, we have spas, we have a salons, we have meeting rooms, we have billiard rooms, we have got pianos, I mean, there is a night life right in that multifamily for seniors there one story, there are four to six courtyards hold on courtyards, where people can go out and really enjoy the fresh breath there. No elevators, seven acres of land for only 88 units, seven acre. So we are just building this Taj Mahal, in all these different communities where people have very old, stinking, you know, very old style 2 3 4 story buildings, and our residents are not getting the same kind of service and the food and everything like we do. And we have our own transportation, buses, everything, um, you name it.

So you are also not, you’re This is not just a quote landlord, you are the operator, which you mentioned the the kitchen facility, but is there any care that’s built into that as well?

Vinney Chopra 12:35

Yes, it’s total care. This is assisted Senior Living luxury, and memory care. And memory care.

J Darrin Gross 12:42

Vinney Chopra 12:43

So about out of maybe 88 or 92 units about you know, 68 or so are or 73 is 68 are regular assisted living. Then we had a memory care also right in the same building. So that because when people are that old 80, 85 you know, they will probably be our average stays 2.4 we manage all our communities also. Just like we’ve been vertically integrated in my life for multifamily. You know, we have the same procedure here. Care givers, we have 55 caregivers for 88 residents Hold on,

J Darrin Gross 13:23

Oh wow.

Vinney Chopra 12:36

55. It’s a three shift. See, it’s a around the clock. And it’s caregiving. And it’s like the bathing and medicine and you know, all those, but it’s not acute nursing home. It’s not rehab center. There are no doctors, right. So we have had zero COVID effect and zero deaths in our facilities, which Emraan has built and we manage seven of them right now. Seven of them. He has built 21 of them, you know, so he’s really done this over and over again. He’s got the general contractor’s He’s got the whole recipe, right? So it’s just my good fortune that I found him through John. And now we are in partnership together like anything. I’m the money raiser, we can raise hundreds of millions of dollars. Next year. My goal is $100 million to raise. And we’re going to be building six to 10 of these facilities every year for the next 10 years.

J Darrin Gross 12:36

Wow.

Vinney Chopra 12:36

Yes, yes.

J Darrin Gross 14:28

That’s awesome. And we’re all are you doing this where you mentioned the Sunbelt kind of thing where?

Vinney Chopra 14:33

You’re right see because as the age groups you know, that 80 85 or 90, gravitation is that the seniors have a better lifestyle in the warmer climate, warmer climate. So that’s why we are going in Virginia, in Florida all over the place, Texas. We’re going big time in Texas. It’s hot there, and Arizona, even coming up here in the Bay Area. We’re in my backyard. And then coming to Washington where you are Portland in Washington, because a lot of seniors are retiring, you know, and my partner based in Michigan, because he’s from Michigan. So if anybody wants to check us out Hampton Manor, just google it Hampton Manor is our brand. And Michigan just say Michigan, you will find there are like 17 different towns in Michigan, where there is a Hampton Manor in every town.

J Darrin Gross 15:31

That’s fascinating. So now is this are your plans to build and hold build offering the holder? Is this a like a sale? Is there an exit date? Like in a traditional syndication?

Good point. Good point. Darrin, I’m an engineer, right? I always think and I see, okay, how I’m going to sell it to my present investors, right? I have the grace of God, I saved hundred 68. Now I have 207. I think I just saw a list going like crazy through click funnel and branding and everything. So we do three point contact and meet with them. And then in the future, when the deal comes we offer right, just like syndication is done. The good part is that we I knew that it’s a ground up construction, my investors in multifamily for the last 13 years have been wanting to get cash flow from day one, I close on the deal. And I start paying them cashflow every quarter from the day of the closing. Right. So I come up with a better plan to tell them first year it’s dirt. So I’ve been using the word Dirt, dirt, dirt, and they understand that and say no, don’t worry about it. Because we give you monthly review of what’s happening with your money with the ground being broken and bulldozers and drone footage of you know foundation and everything. So we got it all planned, where people can go log into their our app for your website, they could see everything happening with their money, then second year, they get not 7% return, giving them 10% or 11% return cash flow. Because we build it in 12 months, we build it and then we start managing it. Actually we are 50% occupied the day we open, because we have a marketing arm that goes in advertises locally, and everything and we get executive directors hired and everything marketing starts. And then by the time we do ribbon cutting for opening, we have 50% already leased pre leased, which is unheard of By the way, within nine months, we are 100% full hundred percent full.

Wow, that’s awesome. So the the target market you mentioned 85 to 90 is that’s kind of the the age of the occupants is that the

Vinney Chopra 18:06

It is. See what happens during this to your audience to assisted senior living as the Word says it’s not independent living, it’s not living in your own home, right. You know, if you don’t need assistance, you could live in your own home, right, as long as whatever age, but if a spouse passes away, we find that the degradation of the life starts to happen. You know, people need that somebody significant, you know, somebody they could talk to, and live with, and you know, get to know and have a social life, there’s the word right social life. And then if they cannot cook, or that’s another trouble, you know, and then if they cannot take medicine and properly and all that, or if they had a slip and fall. Wow. So then families get together and they say you know what mom and dad, you’ve got to get into assisted living. So they start looking for within the 20 30 mile radius where they’ve been living to see where is a good place to go. Right. So that’s the what we do. In our case, we don’t take any medical, any Medicare, no nothing because our facilities for regular people. We don’t charge $7,000 $10,000 a month at all. It’s luxury at a budget, we call it because we charge only 3,800 to 44 or 4,500 depending on the level of service, which includes three meals, snacks, and the use of in of course all the utilities paid their linen, their laundry, everything is taken care except the cell phone. That’s the only thing. Entertainment, ADL says activities of daily living all that done. Care giving is all included in their transportation is all included in there in that price. So that’s what we provide to the our seniors. And they have to do the due diligence, we have to check their health, full health, because we had zero COVID effect, because we are so particular and be locked out. Even the families could not meet their parents, we made ait sure, because we didn’t want anybody to die, you know. So they have been doing this birthday’s through the window, hold on, through the window through videos and all that. So we’ve been very, very particular now we have done quarantine, one segment of our building, we somehow planted where it’s an independent unit with kitchenette and everything. So we are able to put plexi glass and the families have to show 14 days of negative to see their family to their mom and dad. And we would even notice by governor of Florida hold on cutting edge. So on our side, we were the first one, Cape Coral, if you google us, Cape Coral of Hampton Manor of Cape Coral, we were in the news. And then we did the same thing in Michigan. So we got recognized because we are on the cutting edge in making sure that we are able to follow the CDC guidelines, lockdown, zero deaths, zero COVID effect. So we are just very, very particular. Because this age is like that. And our residents live in our communities for 2.4 years average. So it’s not the working class who come in and out turnover is so strong, right? In our case, they come in, then they are there for life. And when we want them to live for five, six years, even their families tell us that Oh, my mom and dad have gained 10 pounds. Yeah, good thing, which is because we are very particular about the five star dining, five star dining. It’s not the same food, which is made for everybody. And everybody gets it. No, no, it’s made to order made to order.

J Darrin Gross 22:13

That’s great.

Vinney Chopra 22:13

The head chef and the junior chefs and all and served in a beautiful dining. They know I just sent to that movie of the place. So you will see that right the whole movie put together we’re putting it on YouTube soon so that he could share with the world. Yeah.

J Darrin Gross 22:30

Well, it’s it’s fascinating from from being more of a an apartment operator with the the general population where you’re like said, You’re constantly chasing jobs, where are the jobs where the jobs are the job? Now your view is totally different where the seniors, right I mean, we’re where’s the

Vinney Chopra 22:47

I don’t need any jobs, I mean, I’m in communities and the lakes and very good lifestyle, and we’re the seniors would like to move, and you know, there is need to be there, you know, so we do captivate, want to share that capture rate is because our product takes six to nine months, sometimes 12 months to pass the ordinances to get the permits to get architectural drawings. So and then we take about a year to build it. So we are coming, looking into the future two years from today, to bring a product out. So we have to be very careful with our millions, that we spend our own millions to do all these things, you know, so, I mean, you know, it sounds easy, but it’s not that easy. I just want to mention everybody, but the good part is the rewards out there.

J Darrin Gross 23:39

No, that’s that’s fascinating. And and I think the thing that I’m most impressed by is just the all the success you’ve had with multifamily syndication. And now you found this new kind of a vein of opportunity with the senior living and it sounds like it’s even, you know, that much more based on way, you know what you have available or what you are working with.

Vinney Chopra 24:02

while you’re working. So true there and then it’s good for next 40 years, I wouldn’t be alive. I’m 68. Right? So I’ll be hundred eight. Maybe I’ll be one in

J Darrin Gross 24:13

See you in the dining room.

Vinney Chopra 24:14

You know our goal, play bridge and cards and billiards and so we’re putting pianos we’re putting all these great things, movie theater, right inside this place, salons and beauty, you know, and the small dining places and just you know, sitting down in the cafe and the Bistro, and going to the swimming pool and putting green, every single one has putting green also, and waterfall functions and everything so that they could really enjoy the life. Our motto is to spoil the generation that has spoiled us. So

J Darrin Gross 24:53

That’s great. That’s great. Well, just the the numbers I mean, you mentioned You know, two and a half years average stay the I’m just thinking about the the type of tenant I don’t imagine they’re too tough or rough on the property, the ability to, you know, the need for touch up or whatever, when we do have somebody move out. I mean, I can’t imagine being here.

Vinney Chopra 25:18

minimum.

J Darrin Gross 25:18

Yeah, yeah,

Vinney Chopra 25:20

you’re right there. And, you know, these are specially designed communities that we build with, you know, high ceilings, right. And also, the doors are wider, everything. And within the apartment, you don’t need too many doors, because they are so frail, in the age group is at 8485 to 90 to 100. So they just should be able to go in and out, as you can see in the movie. So we have just perfecting what it should be, you know, and they love it. Yeah.

J Darrin Gross 25:55

That’s, that’s great. I’m, I’m so happy for you. And congratulations on all your success, sir. That’s, that’s awesome.

Vinney Chopra 26:02

Thank you. And we’re coming up with the book too, by the way, you know, your audience know, this book did really well. And if you have not seen it, please do go and buy Spanish, you know, partners and readers, please go ahead and look at Spanish version of the same book. And then my other book came out, which is the Positivity Brings Profitability. Again, please look at my third book is coming on Investing In Senior Living Made Easy. So we’re really teaching everybody what senior living is about why we feel so compelled that we want to be in this market, along with others. So I have about four businesses right now. Five, six. Anyway, it is buying apartments, which I’ll keep on buying B class B plus, in good growth areas, just like I’ve been chasing that. The other thing is my hospitality, because we’ll be buying we just bought Hilton Garden Inn may be buying Marriott’s and Comfort Inns, we’re looking into now with COVID, we’ll have even better deals come on our table. So we’ve been buying them, you know, when my partners, then my other business is Senior Living ground up, ground up. So that is the one we just share. And it’s a three year hold and everything. We are not selling any securities. But if you’re interested, just reach out to Darrin or myself, you know, and so on. Third one, is we becoming a REIT. What is that? Because Emraan our partner was selling after all this hard work and running the operation and everything. Guess who was buying them? REITS. Or some big fund or something? Then he sat down with them two months back, I think they said, Ron, we want to make you a partner with us. That’s what he said. He said, Really? Okay, how does it work? He realized quickly, he was going to get peanuts, just like 10% in the whole REIT. Here he could that whole hundred or 50% with me if 50/50 right. So he said Mr. Chopra, we’re gonna sell nobody nothing, we could achieve them ourselves. So that’s what we are doing now. So we’ll be buying everything we have building will cashing out our investors. After three years, so two and a half years, get new investors in for the next five to seven years. And then flip it again, get another LLC, the exciting part is there, you’re ready. You do cost segregation every single time when you sell a new in new entity, right? New entities brand new and you do cost segregation, then flip again, sell it yourself for another entity do cost segregation again. And this way I can give my investors so much money back. And then they could even do 1031 so never have to pay any taxes at all ever. They just keep on going from one to next to next next.

J Darrin Gross 29:09

That’s That’s awesome. You keep figuring out the ways to make the money rain. That’s awesome. That’s great. Hey, Vinnie, before we wrap up here, I always like to ask people about risk. You know, the I think you’re one of the first guys I asked it, but it’s been a while. So I’m going to see if you if you don’t mind, I would like to let people know that by day. I’m an insurance broker. And we assess risk. That’s what we do with our clients. And we look to see if we can, what we can do to manage the risk. And there’s a couple of different strategies we look at we first looked to see if we can avoid the risk. Yeah. If we can’t do that, we look to see if we can minimize the risk. And then if neither of those are an option, we’ll see if we can transfer the risk and that’s what an insurance policy is. And I like to ask my guests if they can look at their situation, whether it be their clients, their investors, their tenants, the market, however they want to frame the answer. But if you can identify what you consider to be the biggest risk, and, you know, just for clarity, I’m not necessarily looking for an insurance related answer. But if you are inclined, Vinnie, I would love to hear from you. What do you Vinney Chopra considered to be the biggest risk?

Vinney Chopra 30:30

You know, I’m so glad I mean, you know, I’ve raised $140 million I was just counting in my wife. My wife is my Investor Relations. As many of you know, our daughter, Monica is now VP of operation, and we just grown so much. But the key thing is, as the investor gives you money, you know, Darrin, they want to know, Vinnie, what if you die tomorrow, right? So we have to really as business owners, and I highly recommend everybody listening to us to really sit down with Darrin or anybody who can really change you and tell you, what are the risks involved in your business? You know, it could be your death, it could be your transferring of the wealth, right? It could be like, we’re into ground up construction, what are the different risks involved, when the GC runs out, or runs away, or doesn’t have or slip and fall and, you know, anything, fire is there or wrong, mechanical, you know, systems are put in. So those things are very, very important. Of course, buying the multifamily, the renter’s insurance is so, so huge. Not only that, also the property has to be properly insured. And the lawsuits and the directors insurance, I mean, I got, I had three or four lawsuits in the last 12 years, and I cleaned up, I totally didn’t have to pay with $3 million lawsuit was going on with me, mediation came and the insurance setting for 500,000 I think I have to pay zero money. Zero money. If I had really said, Hey, I’m totally bankrupt, you know, I wouldn’t be bankrupt. But the thing was, I just didn’t let it bother me. I just kept on going kept on going in my thing. I knew my insurance company’s gonna take care of me, right, you know, so it’s very important that we get the best of the best. And, you know, like the GL general liability, right? umbrella policies on every property, I’ve had 6 million to $10 million, even the smallest of the smallest properties, because I believe paying that small premium is well worth the nighttime sleep, which I like to have really good sleep. And then it takes the risk of a you know, I can racial discrimination lawsuit. I got mechanical lien on property. So things like those happen right there. Yeah.

J Darrin Gross 32:58

Yeah. No, they do. They do.

Unknown Speaker 33:00

Yeah.

J Darrin Gross 33:01

I appreciate you highlighting the the the insurance aspect of that that’s always there. And, you know,

Vinney Chopra 33:08

thank you so much. It’s a pleasure to spend time with you. And I hope if anybody would love to find out more about senior living, investing, and so forth through Darrin, please call Darrin and we touch base together.

J Darrin Gross 33:23

And Vinney for the listeners where where can they go to find more learn more about you? You know,

I have actually on over the internet, I don’t do nothing. I just get up in the morning. I’m all over with the posts, because by branding company, you know, I pay them some money in to name India, then you’re using them. And they do all the things for me, but just Google me Vinney Chopra. I have three websites now. One is Vinneychopra.com. Vi nn, e y ch o pra chapra.com. Monealinvest that kid’s name Monica and Neal invest.com. Then my third website, which is getting this for many great great investors is Senior Living investing.co Senior Living investing dot CO or senior living investing Made Easy, the new book that we are coming out with, we have taken the website domain on that one also.

Awesome. I will list all those in the show notes. And I appreciate you doing this thing. I always enjoy the opportunity to talk to you and learn. You always come with great lessons. And I look forward to doing it again soon.

Vinney Chopra 34:45

God bless you, your family and stay healthy, stay safe. You know this COVID is going to pass but let’s just use this time to grow our businesses and to learn more and be more passionate about life because I can spend more time Time What a great thing with lunch and dinner and, you know, breakfast with my wife and kids and do the kind of things we always wanted to do. And that can be right now. So God has given us an opportunity. It’s the silver lining in the dark cloud, we should always look for.

J Darrin Gross 35:18

Oh, amen to that. 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. cr e pn radio.

Announcer 35:39

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Multifamily Syndication 2020 Outlook with Vinney Chopra – CREPN # 234

Multifamily Syndication 2020 Outlook, Vinney Chopra provides his thoughts for the coming year, 2020 and beyond.

Vinney Chopra purchased his first multifamily property, a 14 unit property for $180,000 in 2008. Today he has grown his portfolio through syndication to 4,100 units worth over $300 million.

Before 2020

It took eleven months for Vinney to raise the money he needed to purchase his first 14 units in 2008. At the time, the financial world was in complete melt down. Banks were not lending, and investors were fearful that losses would continue. Don’t forget, Vinney had never done a multifamily syndication before. But that did not stop him from talking daily with investors and real estate brokers.

Vinney’s concentrated efforts during the 11 months created momentum. Immediately following his 14 unit purchase, he closed on a second property with 109 units. He was constantly talking with investors and brokers. Instead of getting discouraged, he kept in touch and underwrote the properties and made numerous offers. Eventually, sellers and investors were ready to make deals, and because Vinney stayed with it he and his investors benefited.

Mindset

Scarcity versus abundance. Looking backwards is helpful for where we have been, but not so useful for drawing a clear picture of where we are going. Ask any economist or investor, “what does the future hold for multifamily?” Most will reflect on the incredible period of recent growth and encourage you to sell or accumulate cash and wait for the crash that is overdue.

If you believe in scarcity, and you are expecting a crash, it’s hard to instill confidence in your potential investors that now is a good time to invest. Scarcity yells, WAIT! We should wait until prices cool and deals are more like they were in 2008.

If you believe in abundance like Vinney, you remain active in the market looking to land deals.

From 2008 to 2014, Vinney and his partner did 14 syndications valued at $100 million. Since November 2014, Vinney and his wife have done $230 million, more than double what he did at the beginning of the recovery.

The key to his success is that he stayed in the market. Even when he did not buy a deal in 2018, he stayed in touch with brokers and investors. He studied different markets looking for growth indicators and emerging markets.

Emerging Markets

To make a sound investment, you need an emerging market. A healthy market for multifamily includes job growth, and inflow of residents that need housing. When demand for housing exceeds supply, you have found a market worth pursuing. The growth of potential renters is made up of three distinct groups, millennials, baby boomers, and immigrants.

Combine this growing demand with the lack of affordable single family homes compared to wages and the demand for rental housing looks strong for the next 20 to 30 years.

Vinney has successfully invested and exited from multiple deals in markets like Texas and Georgia where the demand is super strong. In one case, he invested in 2017 and sold in 2019 for a 50% gain!

Calculated Risk

There are no guarantees, but if you do your homework, and understand the market dynamics, you can hedge your bet, minimize your downside and take a calculated risk. Housing is a primary need, and apartments are more affordable than single family homes.

The market is dynamic. In 2018, the surge of new investors flooded the market, so much so that Vinney did not buy one property. He believes that the demand was so great, that investors were overpaying for properties. In 2019, he found the over paying buyers were not as numerous, interest rates were lower, which increased cash flow. The combination of these circumstances provided better investment options and he purchased two large newer properties.

Life is full of risk. If you put your money under your pillow, or in the bank, you will make next to nothing. When you leverage into real estate, the bank provides up to 80 percent of the capital needed to buy your property which is in high demand.

Year over year, rents increase, net operating income increases, values in crease, and so too does your equity.

Value Add

Value add is the best way for a buyer to create equity in his new purchase. An experienced buyer can recognize opportunities the seller is blind to. Value add opportunities range from minimal efforts from raising the rent to market to a heavy lift investing millions into capital improvements.

The key to a successful value add strategy is to recognize the opportunity, and properly underwrite for the cost to implement the changes quickly. You want to hit the ground running as soon as you acquire so that you can benefit from the improved cash flow and increased valuation.

When approaching potential investors, it is important to have a sound strong business plan that assures the investor there is a plan to take care of and return their investment.

Underwriting is key in any market. A good deal is always a good deal.

Multifamily Syndication in 2020

Multifamily Syndication is full of opportunity in 2020. Investors are looking for greater returns than what they are getting in the stock market. For syndicators who recognize this, and understand how investors can invest their retirement funds, 2020 can be a great opportunity for both syndicators and investors.

The national commercial real estate brokers, CBRE, Berkadia, Marcus Millichap have published their market forecast and in all cases, the next 20 years look bright.

Relationships

Relationships are key to be successful in multifamily syndication. If you have not yet syndicated a deal, Vinney suggest you work with seasoned syndicator to learn how to do it properly. Once you have some experience, you have multiple options available to you. You can raise money or be the key principal leading your own syndication.

BIGGEST RISK

Each week I ask my guest, “What is the Biggest Risk Real Estate Investors face?”

BIGGEST RISK:

Wow, I’m so glad you shared that because I settled three lawsuits. You know, just in the last quarter of 2019. So it’s very fresh in my mind. And actually, one lawsuit was going on for about two and a half years. Nothing major, but it was major in the sense that something happened with one of my contractors on one of my property. And I’m so glad that I have had full coverage, you know. And they said you settle the issue for almost like seven hundred some thousand dollars. And I didn’t have to pay a penny.

Another thing, you know, Darrin, my fire happened, you know. Right there in Atlanta property and that was a fire. I had a twenty thousand dollar deductible only, and that settled for two point three million dollars just to let you all know. But it was only possible because of people like Darrin, you know, who were able to sit down with me and make sure that we get the proper insurance.

I got hacked also in 2017 lost $250,000. And guess what? I did not have the Cyber Insurance. And that got me hurt. And, you know, I never looked back. I always look forward and say, what can I do today to make myself better? And that’s OK. But now I’m fully taken care of by my I.T., Cyber Security and Insurance and everything. So the key thing is I think insurance plays a very important role.

I had another lawsuit with the, you know, firing somebody and they said it’s racial discrimination firing. So these are very important issues. You’ve got to make sure you’ve got great attorneys, first of all, who are with you, dealing with you, looking at your contracts and everything. I’m very happy to say I didn’t have to pay much again. You know, it could have been millions of dollars of lawsuit. But by hiring the right people and having the right insurance companies and all that, it helps a lot.

For more go to:

Website: www.vinneychopra.com

Book: Apartment Syndication Made Easy

Text: Learn to 474747

Email: jon@vinneychopra.com

Multifamily Asset Management with Vinney Chopra – CREPN #189

Multifamily Asset Management is the rarely talked about, but vitally important, required aspect of multifamily investing success. It is key to realizing the profits investors expect.

Vinney Chopra shares some of the critical steps successful operators take to make their multifamily investment operate to achieve peak performance and maximum returns for their investors.

What is Multifamily Asset Management

Multifamily Asset Management is not property management. Asset managers manage and work with property managers. The asset manager is hired by and reports directly to the syndication principal / sponsor. They are not responsible for interacting with investors.

Asset Management Duties

Asset managers engage weekly with property management to keep them focused on the immediate operational task at hand. Additionally, they make certain progress is being made towards the end goal. These calls can occur in person, but more often is done through phone or video calls.

Each weekly call will address specific key performance indicators including:

Collections
Utility collection and RUBS
Delinquencies in rent
Occupancy and Vacancy reports
Price sheet, reflecting unit rent prices
Budget versus actual income and expenses
Capital improvement projects
Renovation Schedules, detailing the work needed to complete so the unit can be rented. If work cannot be performed by property management staff, subcontractor proposals are sought.
Vacancies, unit turns, collected rents, delinquencies, rent increases, vendor contracts, and capital improvement work schedule for larger value add projects.

Property Management Duties

The property management team consists of the following members:

Community Manager: leader of the property management staff.
Lead Maintenance / Technician: reports to Community Manager.
Assistant Community Manager: is a Community Manager in training and assist the Community Manager in all aspects.
Porter / Helper: Assist the Lead Maintenance Technician.
Make Ready Person: Responsible for turning units between residents.

The number one responsibility of the Community Managers team is leasing units and rent collection. This is achieved through regular communication with the residents so that they understand residents intention regarding the renewal of their rental agreement.

Marketing available units using all of the social media websites that target people looking for apartments in your neighborhood. There are several tricks management must be savy to in order to keep your property as a top offering. When these are employed, your property is featured more prominently and you receive multiple inquiries from prospective residents.

Additionally, the management team must deliver the service from their customers, the residents. This means promptly attending to the service requests, and following up with the residents to gauge their satisfaction.

Paying attention the physical appearance of the grounds goes a long way to communicating pride in the property. Management must walk the property daily and recognize and correct any problems or potential problems as soon as possible.

This level of care can provide referrals from your happy residents to their family and friends who can become future happy residents. Only when you are in tune with your residents can you achieve expected rental retentions.

Additional Management Duties

Management must constantly evaluate their staff and answer the question, “Do we have the right people in place and the needed equipment to complete the job?”

When your team acquires or is working to sell your property, your management team is critical to the transition.

Prior to acquiring a property, It is important to establish accounts with all utilities and vendors to make certain all of the services continue and there is no interruption in service.

When you are ready to sell, your property management team must make certain your rents hold steady. Any dip in occupancy can create problems with valuations and the sale. Your property management will be the face for your property and company when dealing with open houses, and property tours for commercial real estate brokers and investors.

Community

When Asset Management and Property Management work together, they can create an inviting community for both current and future residents. Here are some of the physical property traits Vinney has employed that work.

Make the grounds as attractive as possible with well trimmed hedges and landscape lighting.
Four large flag poles that fly, the US, State, Property & Seasonal flag
Amenities and reasons that create reasons for residents to interact with staff and fellow residents. These include: inviting club house with flat screen TV’s, cookies, water and Friday morning Breakfast on the Run.
Dog parks, more and more residents have dogs, and this is an inexpensive place for residents to inner act with other residents and get to know each other.

BIGGEST RISK

Each week I ask my guest what is the Biggest Risk they see that real estate investors face.

BIGGEST RISK: Declining Occupancy. If occupancy goes down just a few percent, it can really hurt your

How to manage the risk?: Do not hesitate to act. Provide incentive to property management to keep the property occupied at and above 95%. For instance, the office is closed on Saturdays as long as the occupancy is above 95%.

BONUS RISK: Delinquencies; Why is the rent not being paid on time.

How to manage the risk? Pay attention to the rent as a percentage of income. If the residents do not make enough income, they cannot easily pay the rent.

EXTRA Bonus Risk: Walkways must be free from trip hazards.

How to manage the risk?:

Bring in someone from the outside to inspect the condition of your property. When you are looking at your property day in and out, you can lose sight of certain conditions that need to be addressed to avoid any needless injury, claim or lawsuit.

For more, go to:

www.vinneychopra.com

vinney@vinneychopra.com

Text: LEARN to 474747

CREPN #184 – Syndication Profits from Multifamily Sale with Vinney Chopra

Syndication Profits are proportionally the greatest when the property is sold.

Multifamily Syndicator, Vinney Chopra, takes us through a recent property sale, providing insight to investor earnings, including payment during operation and through the disposition.

Preferred Return

Most multifamily syndicators provide a level of preferred return to the investors from operating the property. These proceeds are distributed either monthly or quarterly. Vinney pays his investors quarterly, providing a level payment for three quarters, with bonus returns paid after the fourth quarter.

When you buy a value add property, you have to implement your value add plan in order to increase the value. Renovations, rent increase, etc, are all examples of ways to increase the net operating income and the property value.

Syndication Profits When You Sell

When investors invest their money into a syndication, they are informed of the exit strategy and a window of time for when the property will likely sell. It is upon the sale of the property that the majority of the syndication profits are realized.

In a recent sale, Vinney received a Broker’s Price Opinion that the value had increased over $3 million since he and his investors purchased the property. When the investors learned of the valuation, they elected to sell.

Once the decision to sell is made, investors are made aware that the quarterly distributions will cease until the property is sold. This is a measure to conserve cash incase there are some buyer due diligence requirements to complete the sale. This avoids the need for a cash call from the sellers and or a discount at closing.

The sales process can take several months. For this reason, it is very important to vet the buyer’s ability to close. If you chose the wrong buyer, and they fail to close, you can lose market time, and frustrate your investors.

When done properly, the syndicator buys a property, implements the value add plan improvements, increases the rent, noi and market value. The cycle is completed with a successful sale. This makes investors very happy, and likely willing to invest with you again.

BIGGEST RISK: Each week I ask my guest what is the Biggest Risk they see that real estate investors face.

BIGGEST RISK: SEC Regulations:

Be transparent. Make certain you follow the rules, have pre existing relationship with investors, and they can afford to invest in your deal. You must guard your investors interest.

For more, go to:

www.vinneychopra.com

Text: SYNDICATION to 474747

Multifamily Investment Syndication

Prior Multifamily Syndication episodes with Vinney Chopra

CREPN #145 – Why Multifamily Real Estate Investing with Vinney Chopra

CREPN #149 – Why Multifamily Syndication is a Great Option for Real Estate Investors

CREPN #153 – Building Your Multifamily Syndication Team with Vinney Chopra

CREPN #157 – How to Attract Capital & Communicate with Investors with Vinney Chopra

CREPN #161 – Multifamily Underwriting with Vinney Chopra

CREPN # 165 – Letter of Intent & Purchase Sale Agreement with Vinney Chopra

CREPN #169 – Syndication Profits from Multifamily Sale with Vinney Chopra