In this exciting video, join us on a journey through my very first large multifamily real estate deal, where I share the ups and downs of my rookie experience and how it ultimately led to real estate success!
From the initial challenges and uncertainties to the triumphant moments of closing the deal, I’ll spill all the details and valuable lessons learned along the way.
Whether you’re an aspiring real estate investor or simply curious about the world of multifamily investments, this video is packed with insights and inspiration to help you on your own path to success in the real estate market.
Don’t miss out on this captivating story of growth and achievement!
Transcript:
Chris Bounds 00:00
Tell me about your first large multifamily deal.
Vlad Arakcheyev 00:02
Yeah, somebody came over to me and they said, How about you be an LP in the deal? And I said, I don’t want to be an LP, I want to be a co GP or GP. And that the conversation took like 10 minutes. Basically, the guy was trying to raise money. I didn’t even know what it was at the time. He calls me back few days later, and he goes, if you want to be a coach up, how about you speak with the operators and try to raise capital in the investor relations on the deal? Can you do that? And I’m like, Yeah, I can do that. Sure. So I have we spoke with I spoke with the operators with with the main team, and we liked each other, and they go, Well, how much can you raise?
And I said, Oh, it’s easy. 500,000. And they’re like, Well, you know, what, how about you try for 200. And if you raise anything higher than that, it’s all a bonus. So I’m like, Okay, sure. It was 506 seat. It was 208 doors in San Antonio, I was very excited. I didn’t know exactly the process. But I knew I could advertise. And that’s what I was doing. I was going on Facebook and LinkedIn everywhere. And that was advertising this deal. I was going on networking events on Zoom calls. And, but and I hadn’t nobody interested. Maybe, and I know now why. But at the time, I didn’t. And I’m like, but the deal is so good. How come? Nobody’s like jumping all over?
Then somebody said, Well, why didn’t you try your friends and family. Not a single of my friends invested in this deal. Not a single person. And I knew them for 30. I know them for 30 years, and they have money. And they realize that they’re not investing in the deal. They’re investing in you. So they just didn’t believe you that you could execute this, that you’re the new guy, maybe you too desperate. So combination of those things, turned off investors. But on one of the calls. I see I saw one person who needed to do a 1031 exchange. And they contacted him directly. And I said, Hey, listen, we have this deal. We accept 1030 ones. Do you would you like to take a look at it?
And he said, Yeah, sure. So long story short, he had $1,000,000.10 31. And he took the deal. And so with one person, I managed to raise a million with the 1031 night Oh, yeah, it was completely crazy. I wasn’t even sure how the whole thing works. Of course, I was reading about it educating myself, like crazy, because I’m educating myself on GVS and how the structure is, but specifics of 1031 and how it’s transferred in the full 10 and some common structure. It’s more involved. You have attorneys involved, and I told everybody listen, I want to be on all the calls.
Not because I’m a control freak or anything like that. I want to learn, please include me. I’ll be like a fly on the wall. You’re not going to hear from me, I’m just going to learn. And that’s how my first syndication was. I consider that a success up until you’re ready for this. Two weeks before closing. And that happened last September, the bank pulled out of the deal. Nothing. Yep. And I was already counting my money. I was super pumped, which
Chris Bounds 03:38
is not really, um, has not been uncommon, unfortunately, over the last six, nine months or so with rising interest rates. But yeah, go ahead.
Vlad Arakcheyev 03:46
Yeah, the the rates started shooting up by 75 basis points every month, bang got cold feet, pulled out of the deal. We we got another lender, we couldn’t get the same rate, because the rates obviously jumped up, we couldn’t target the same returns to the investors the deal fell through. So that’s my very first deal. Very first syndication. And even though some people might consider it a failure, I don’t. It was a huge learning opportunity. I know how everything is structured.
I learned so much because of this. Because you know, when we fail, we learn we made when we make mistakes, we’ll learn as much as possible. So I started taking classes educating myself. I mean, the deal was great, the returns were great. Completely not a fold. All the money got returned back to the investors. Nobody lost a single penny. We were very happy about that, obviously. I mean, we couldn’t negotiate with the lender. We couldn’t do anything, unfortunately. But after that deal Everything started snowballing in the positive direction. So after that deal, we were just, you know, super excited of what’s going to happen after that.
Chris Bounds 05:08
Were you able to do any? Get that get that investor in any other opportunities?
Vlad Arakcheyev 05:13
Yes, absolutely. Yeah, yeah, we got that investor into another opportunity in Dallas. So
Chris Bounds 05:20
it just shows you like, when you keep chipping away the one person, one event or one act, just one thing can totally start tipping the dominoes and tipping everything’s in your direction. It’s just don’t quit your your three feet in the water. People know the story about three feet from gold. You’re three feet from gold to keep digging. So how do you stop getting frustrated? You may not have ever got connected with that one investor is that one investor was a lot of I mean, one, they had something that operators needed.
And that was something how you can make a connection, plus adding another value to like investor relations and asset management when not to operators to help them take down a deal. And just quick disclosure, like, you know, this is where SEC attorneys come in, like, talk with them, make sure like there’s definitely rules on raising money, what you can do what you can’t do depend on the type of the deal and that was a key, I will succeed. Is it JV and broker dealer or a lot of stuff?
So very complicated talk with attorneys, so you don’t get in trouble. But anyway, first deal. It wasn’t a failure. You learned a lot using the deal. Yeah, but you do go on and successfully close other deals with other operators.
Vlad Arakcheyev 06:41
Oh, yeah, absolutely. Then we started, we started, everybody. I mean, people noticed us. So notice me, I was all over social media. And they started educating myself and growing my brand. So after that, that deal in Sarasota, we closed that immediately after I went direct to seller in Kansas City and found 40 units. And that’s a JV as well. So we got that deal closed. And that deal comes with land also, which is zoned for multifamily, but approximately three acres of land if I’m not mistaken, it was 40 doors. Shortly after, I started working on another syndication which is 419 doors in northeast Dallas, with an experienced team also who I met through my network and Jake and Gino community. Close that.
And so I got both sides here jayvees On small deals syndications enlarge, and of course learning from a more experienced team that’s been in the game for years that that went full cycle. So many times I was I was just so pumped to be given this opportunity. And after that, two more deals in the Carolinas that jayvees Also, one the student housing and one is built to rent. We’re actually trying out something new now. So we got 19 Brand new, single family houses.
We bought a whole block in Boone, North Carolina, and wheat and all long term rentals. But two of them would try and go for midterm rental to cater to traveling nurses because there was a hospital literally five miles away from the property. So we thinking of converting them into midterm rentals and seeing how that’s gonna work. Ask me in the here, I don’t know anything. We just it’s a buzzword
Chris Bounds 08:42
that this whole midterm rental, you know, I don’t know if I’m sure it’s always been there, but I heard it a couple months ago. I hear it all the ways now. So I don’t know if it’s just like you know, having a viral effect in the investor community but it has its place this is your corporate leases, your traveling nurses, which we get with our short term rental. We’ll just get nurses that’ll book 3456 weeks, which is much longer than your typical three to five or seven night. short term rental vacation are so interesting. Interesting.
Vlad Arakcheyev 09:18
Awesome. Yeah. So it’s, it’s after the first deal that might be considered, you know, a failure but not Not, not to me. This This happened for me, I believe not to me, and it really accelerated everything. And really what
Chris Bounds 09:37
you got is prior to that, you had theory like you knew people were doing it, but it’s still to use theory. Now you’re in the mix and everything is real. It didn’t make it across the finish line. Everything was real like you the actual raising money, the syndication or the entity documents working with the attorney Is the insurance, the the bank and the salaries and all stuff, all this is real. You just unfortunately, hit a roadblock. But the education that you get from that probably this is just my theory here, gave you the confidence to go on and be more successful in the next deal. So as you’re talking with prospective investors or operators, you you have a certain tone in your voice that is going to be translated when you’re talking with folks can be the same words, but that confidence really, people pick up on it.
Vlad Arakcheyev 10:35
They sure do. Yeah, without a question. Because you already know, what should you should be looking for what to be asking what you know, you even know the objections that you might be getting in, you kind of just address them before they even arise. So, so you, it comes with experience. And I’ll give you another one I was I was speaking with brokers. And this is funny, some of trying to speak with brokers. So instead of calling Texas and speaking with Texas brokers, I just got brokers from Oklahoma, and call them and people like, why? Well, because I didn’t know how to speak with brokers. And I don’t care if I crash and burn in Oklahoma because of my market.
So I called like 20 of them. And literally first five hung up on me because they asked me a question to him. The question is basically, to see if you’re legitimate if you’re a real buyer, and I didn’t even know what to what to answer, because I didn’t know I really didn’t. So I practice on a different market on different brokers. And then got my reps and, and when they started calling Texas and started calling Kansas City, I already knew all the objections. I already knew what they’re gonna ask me I had my pitch I had my team ready I had everything ready. So by then, everything got incredibly easier because I got my reps and I got you know, I got to practice on somebody on on somebody in the different markets. I love
Chris Bounds 12:11
that new and you can do that and a whole bunch of different things with sales or negotiation, just in that safe zone, negotiating a discount for your Starbucks or for oil changes very, very safe zones where there’s no penalties, it’s not really gonna affect you, you know, as you learn but so you’re doing that in other markets and that way you’re you’re a little bit more experience when you go into the market that you really want to be in