In this episode, I talk with Vlad Arakcheyev.
Vlad is a Realtor and an active investor in land development and over 500 multifamily units.
We discuss how he started investing in real estate part-time and ow he finally got the nerve to quit his job and go full-time.
He shared why he transitioned from single family to multifamily real estate and his first multifamily investment deals.
Whether you’re a seasoned real estate investor or just starting out, this episode is packed with valuable insights that you won’t want to miss.
Don’t forget to like, share, and subscribe to our channel for more inspiring stories and informative content.
Transcript:
Vlad Arakcheyev 00:00
A lot of people said, I read Kiyosaki his book Rich Dad Poor Dad and open their eyes and stuff like that and everything clicked into place. I read the book too. It was great, but I could not picture in my head how to do it. I was not mentally prepared for this. I was too much into corporate culture. I’m thinking of bonuses or thinking of winter vacations without thinking any they can be a vacation. I don’t have to wait till winter. I don’t have to wait for bonus time to get a bonus. I can get bonus at any time.
Chris Bounds 00:30
In this episode, I talk with bladder rochiev. Vlad is a realtor and an active investor in over 500 multifamily units and land development. We have a really interesting conversation on how he started investing part time. And then how he finally got the narrative to go full time in real estate and quit his former job. Talking about his first real estate deal is going from single family to multifamily what his first multifamily deals looked like. Hope you enjoy now onto the show.
Vlad Arakcheyev 01:02
How are you doing? I’m doing great. Thank you so much for having me on your show.
Chris Bounds 01:06
Absolutely. Thanks for coming on. I know we spoke a few weeks ago and Buddy on the podcast look forward to having a having a conversation. And so you’re in real estate real estate developer, you get real estate license also in land development and multifamily investing. And we’ll get to that I definitely have some questions that I know folks listening, though want to hear. But before we get there, you weren’t always a real estate investor. You actually worked in corporate America. So what were you doing before all this real estate came into play?
Vlad Arakcheyev 01:41
Yeah, completely crazy. I was a, you’re ready for this, you’ll never guess I was a graphic designer. All right. Completely unrelated to real estate. In fact, I’ll give you this before I started in real estate. I didn’t know anything about it. The only thing I’ve done in real estate is buy my house off an MLS with a real estate agent.
Vlad Arakcheyev 02:06
And that’s it. So completely green,
Chris Bounds 02:09
you’re in graphic design. And you’ve been doing that for an extended part of your
Vlad Arakcheyev 02:17
corporate career. Right? Yeah. All my life. Yeah, I worked in the advertising agency. And then we did like large format printing, which is like billboards that you see on the side of the highway, I did cosmetics, you name it. And they’ve done it over a 15 year career actually even longer. So what
Chris Bounds 02:34
what made you decide to think about real estate? And when you thought about real estate, was it more on the passive side? Or it was it jumping in the trenches and going out taking out taking down your own deals?
Vlad Arakcheyev 02:48
Yeah, it’s actually it I have to give all the credit to my wife, she, what happened is COVID it and I got furloughed, because it’s non essential business. So I didn’t know what my next paycheck was coming from or when got unemployment, obviously. But I didn’t know if I was going to be called back and I got a house two kids, three cats, you know, gotta feed those cats, right? And my wife said, Hey, listen, I didn’t try being an agent. Just the regular realtor here in Jersey, you know, people need housing, right? So that’s extra income. So I, my personality is very green. I didn’t know anything I don’t like I don’t like to make myself uncomfortable.
Let’s just say that. And I told her no for a long time. And then she goes, will did you hear about the tax benefits that come with real estate. And that caught my ear immediately. And I’m like, Okay, let’s explore this now. And even though I got recalled back, I started studying at night, government real estate license and started flipping and wholesaling straight after that, because I went to local meetups, and I thought I was the coolest, right. I’m the real estate agent. Yeah, people like naps. Come on, you can do this thing called wholesaling, and flipping. And I’m like, what is that again? And that’s how my investing kind of got started in single family space.
Chris Bounds 04:19
So before your real estate license, you had zero real estate experience.
Vlad Arakcheyev 04:25
Never I didn’t even know how to read or fill out a contract.
Chris Bounds 04:30
Awesome. So your real estate license, and it’s essentially an immediate opening into the investor world as opposed to going out there being a production agent working with traditional buyers and sellers. Is that right?
Vlad Arakcheyev 04:44
Yeah, yeah, I What I’ve done is I started going to these meetups around New Jersey, and I’m thinking there’s got to be something else. And also my initial thought was let me find some clients. But all these clients were looking at slips and something that’s really beat up and I thought I was gonna sell beautiful luxury apartments and houses well you know so I tried and join them right be in the realtor have access to the MLS now I’m flipping and wholesaling a little bit on the site always partnering up but shortly after realize he’s got to be somewhere else, we have to do something. So passive income, that’s where the money is. That’s where everything is true wealth, right?
Vlad Arakcheyev 05:31
Freedom of time.
Vlad Arakcheyev 05:32
So we got a rental, single house single family rental in South Jersey, and it was great. It was going fine. We will netting $1,000 a month. So it really really good buy. And, but still not enough because me I would say eight months has passed and I’m like we need something else. Because if you stop producing, if you stop reaching out, everything dries up. Right your flip, stop your wholesaling, everything kind of collapses. So we were looking at to grow more. And ultimately we’re thinking well, we can buy some duplexes, maybe a quad or something like that. And then somebody said, What’s stopping you from going like big, large multifamily commercial?
And we’re like, Well wouldn’t know anybody and wouldn’t know what how to start. And they’re like, Well, how about mentoring, covered education covered being in a space where large multifamily investors and buyers are so we got tickets to Houston, Texas, to go to a huge multifamily event. I was really skeptical spending $1,000 on a ticket flights, hotels. I was bummed, actually. I’m like, What are we doing? This is horrible. On the flight over on the way back, I was so pumped, I couldn’t sleep. I’m like, That’s it. We need mentoring. We need to get some sort of educational we need connections. What do we need here to get into multifamily space? I don’t want to do single family whatsoever forget about flips and wholesaling.
Vlad Arakcheyev 07:12
What if it was that open? I would have been what what
Vlad Arakcheyev 07:15
do you recall the event? Yeah, it was MFI N multifamily investors nation in Houston, Texas.
Chris Bounds 07:21
Okay, so I was that was 21 or
Vlad Arakcheyev 07:25
22. When he won? I’m trying to remember I
Chris Bounds 07:29
don’t think it was at that event. I think it was in the 22 I think I had a conflict 21. But yeah, yeah, I know the event you’re talking about. And it’s an it’s powerful. And I know the guys that run that event, and yeah, it’s a really good event for
Vlad Arakcheyev 07:43
800 people. I mean, I was blown away. And you know, you know, what really struck me was the generosity, the generosity of older people there, right. They were generous with their time. And they were explaining things to me, they gave me their contact information, call me at any time. And it was true. I mean, then I’m thinking, what are they going to do? What a guy like me, I have nothing to offer absolutely nothing.
And one guy goes, Hey, listen, we were in the same shoes like you five years ago, seven years ago, three years ago, whenever so we can we know as long as you work hard, you put your head down you focus he will be exactly what we eat in even higher. So I’m like, wow, this is so generous. And that’s how my career got started. As soon as we got back home.
We started interviewing mentors. And we call everybody spoke with everybody we join Jake and Gino it’s a large multifamily mastermind and took off running ever since we identified our markets which is Houston, Dallas, in my case Kansas City as well and we purchased some stuff in the Carolinas also so these are the three markets that we are targeting only multifamily and yeah it’s it’s been very exciting.
Chris Bounds 09:06
Yeah, I know Jake and Gino I’m not a part of their community or really any any mastermind but um I know that I’m I’ve actually had Gino on the on the podcast. So I really like I really like those guys what they stand for. And I do know a few folks like you who are in the community and had good things to say about him. But backing up so you get your real estate license. Very quickly you realize where you want to where you need to be which is multifamily. But in that interim Did you do any wholesale or flip deals?
Vlad Arakcheyev 09:35
I know you had a rental yeah, I’ve done a few you and I
Chris Bounds 09:42
yeah so you’re you didn’t like them and what for what reason? Did you not like them?
Vlad Arakcheyev 09:47
You know what? Number one it was? oversaturated that’s number one. And I’m not really afraid of that. But what was a? Everybody was It was no consistency. Be because one person said, Oh, by the way, it’s not legal. And then my broker was saying, Oh, you shouldn’t do this. And then another person said, Oh, we should do this. And what really opened my eyes was actually got a house on the contract. And then somebody else cut me, an undercut me when directly to the seller, and offered him $5,000 more. And of course, the seller signed another contract with the other person.
And additionally, and I’m like, How can this possible but now I know you can cloud the title and you know, it’s a dirty business, stuff like that. Yeah. And additionally, what really struck me was crazy. daisy chaining, and now I was like, you can be serious. So I got a house on the contract. I thought the person was an end buyer. But they weren’t they were another wholesaler. So they got a contract with me. So I would the buyer, another person would meet and they would be on the contract with the wholesaler. What would the end what Yeah, so you get you you have an under contract directly with the owner.
Yeah, you’re selling you’re wholesaling this contract with someone who you think is an end buyer? Yep. They sign with you. And they’re out shopping or deal. Exactly. And you know, what’s really crazy? After one day, I saw my deal shopped around on Facebook. And they go, Colin, second. It’s not my deal. And I’m like, wow. And they texted the guy and I’m like, What are you doing? It’s my deal. He was like, well, we’re on the contract. I can do whatever I want. And like, oh, boy,
Chris Bounds 11:40
did they put down earnest money? No, no. I always tell folks like, the surest way to and there’s nothing wrong with daisy chaining. If they’re transparent. The problem is they typically aren’t. So if they’re gonna tell you, hey, look, I’ve got a huge buyer. Listen, I guarantee you like, I’ve got buyers who can do this and blah, blah, that’s fine. But, but and this is where you can really get them on the hook or scare the you know, scare the bottom feeders away. Yeah. Earnest money. Like, sure. Great. You can get a good buyer. $5,000 non refundable, earnest money. You want to offset your head? Or if you give an option, option, period, yeah. 24 hours? Yeah, I
Vlad Arakcheyev 12:23
really don’t know. But that before, and that was my first two deals. And I was really bummed. And I’m like, I know people do it. I know, they find deals. You know, it’s funny, I use wholesalers now myself, for multifamily deals land deals that I do, and I look for. So I use it myself. But now I know what to look for and how the whole system works. But it was just not for me. The my ultimate. My ultimate thing was freedom of time, which is true wealth, in my opinion. Yeah. So and where can I get that which is passive income. And I moved.
Chris Bounds 13:05
Yeah, and it was just like so flipping, wholesaling, great ways to make money traditional agent working for commission, great way to make money it will do is being graphics designer, that’s a good way to make money, but they’re all jobs. And the moment you stop those activities, the income stops to end. Now with a little caveat, if you’re part of the top 1% you’d like and ridiculously few people will ever do this. If you’re able to build a machine that’s well run enough and large enough to afford like a CIO or a CEO or they can run it and now you can step out of that seat and be an owner then then it can be become passive but I can only point to and I’ve been doing this a long time.
I can only point to a couple people who at least from the outside looking in and also personal conversations. I’ve been able to do that it’s ridiculously few most people just become in the Cashflow Quadrant Rich Dad Poor Dad may become an S. Yeah, you know that they’re self employed and they’ve got a high paying job. Yeah, but they’re not and especially
Vlad Arakcheyev 14:12
now if you look at this market cycle, right, when everything was going up, it was much easier it was a lot of movement around wholesaling and flipping. And now all my friends like I know a few few of them actually they just sitting without any deals because you have prices of prices of housing really and but the the insurance I mean the rates and everything just completely reversed. So what happened is people are still looking for them, but they need to they need to get them at better prices. Yeah, right. They can’t they can’t do that. They can’t realize it’s a bid ask gap.
Chris Bounds 14:51
Sellers wanting yesterday’s price buyers wanting today’s value. Oh yeah. And it’s just it’s gonna take time to close Unless something else changes, like interest rates were to fall back down unlikely.
Vlad Arakcheyev 15:06
Yeah. And of course, the materials went up as well. I mean, that that was labor is a huge factor. So yeah, but it’s, it’s definitely it’s definitely interesting. It taught me a lot. It taught me a lot of lessons on how to protect how to protect myself how to ask the right questions. I mean, I am not going to consider that a bad experience. It’s just something different. Something that for me,
Chris Bounds 15:33
you learned, and you also learned with your single family rental. So you got a single family rental, it’s cash flowing. What was the point where and you know, you mentioned so when someone did plant that seed, hey, why don’t you just go bigger? But was that it? Or was there some other inflection point to where you’re like, I don’t need to I don’t want to grow a portfolio like 50 or 100 of the single families. I’d rather just go out and buy multifamily. What was that decision point? Yeah, I was.
Vlad Arakcheyev 16:03
We were thinking and I was self managing my rentals. And I started receiving, like crazy calls. I’ll never forget, somebody calls me and he goes, there’s a raccoon on my roof. Why didn’t you go like, chase it away? And I was like, a raccoon. You live basically in the woods? I mean, it’s not. So what when I started receiving these calls, it was just, it was just I it was just tracking me from where I wanted to go. Additionally,
Chris Bounds 16:36
what and Rubik on average, what days of the week? Do those calls come in on? Oh,
Vlad Arakcheyev 16:43
boy, they will like Friday night or some Saturday?
Chris Bounds 16:47
Always on Friday and Saturday? Yeah, like, on a holiday weekend? It spikes? I don’t know, I don’t know what it is. It happens
Vlad Arakcheyev 16:55
all the time. It’s like Friday night, all the contractors, my my handyman is sleeping or somewhere away on vacation. And these calls are coming in. Oh, there’s this was stuck. And now we have an alarm wouldn’t know how to shut it off. And there’s a leaky toilet and I’m like, Oh boy, here we go. I’m like you have four. Right? So just stop using one up until Monday. I mean, I’m trying to I’m trying to be considerate. But at the same time, I’m thinking all these expenses are I mean, I kind of expected them, right?
I knew they’re gonna happen. But and not at that value. And also, if you have a person that’s moving out, you have basically two months of vacancy. I mean, two months of nobody paying you and then you have like 100% vacancy, right? For these two months, because you need to paint you need to fix then you need to find another person. And then by the, by the way, by the time they in two months have passed. So it’s it’s it’s a it’s a process. Yeah.
Chris Bounds 18:04
Which brings you mentioned $1,000 on cash flow. Was that gross? No, that was net. Okay. So that you so that was after factoring in for vacancy repairs capex? Yeah. Which is really strong. Now, depending on the price point. I mean, what price point was it? We purchased it at 240,000. Okay, yeah, so really, really strong cash flow. But regardless, like most people, you raise a lot of good points like, you will have vacancy, you will have repairs, you will have capital expenditures, they all will happen even if you have the best tenants that never call you.
Because the moment they move out whether you need them to move out, or they decide to move, you got vacancy. So it’s absolutely important. You’ve got to escrow for those expenses. Because you could probably absorb one financially, but you got three or four of them, and they start popping like this, like that, that can add up and you find yourself in a bad situation. But you’ve actually decided, I don’t really want to do this. There’s got to be a better way
Vlad Arakcheyev 19:06
in the year. I mean, I’ll give you this the first one of the houses that we purchased, pretty much the person moved in, and the main sewer line got clogged. Yeah, and sewage started coming up. And that was I’m like, he can’t be serious what is happening here, and then we thought we can just snake it or something like that. And apparently the roots of the trees cause the whole line to collapse. And I’m the lucky one that bought the house exactly a month before that collapse. So roto rooter came over. They gave me a quote for I think like $9,000 to basically dig in, dig a hole trench through the front yard and redo the whole thing. So that was an extremely costly and expected expense and we build the
Chris Bounds 19:57
noise smiling because I get Those calls, we’re dealing with a sewer issue right now on a single family. That’s one that I really want to sell. I know that pain very well.
Vlad Arakcheyev 20:08
Yeah. And they sold it. I listen, I don’t mind dealing with it. The only thing is, if you’re dealing with who’s gonna look for more properties, how you’re going to grow, if you are physically picking up the phone and answering calls about raccoons and clogging toilets,
Chris Bounds 20:28
what were what made you not just turn it over to a property manager?
Vlad Arakcheyev 20:33
Two things I didn’t know how to build a team back then. And also, I was not at that level yet, I thought. So I’m thinking, I’m gonna do everything myself, I got a handyman. I’m gonna get all the calls. And I’ll take care of it. But ultimately, it didn’t work because it was taking up my valuable time. Yeah, instead of growing, instead of looking for more houses, instead of selling houses as a realtor, right, making more money, I was spending my time and money trying to fix problems at the rental properties. Yeah,
Chris Bounds 21:14
and we’ve always self managed except for the duplex in any multifamily. But I’ve got an assistant team that they do all the utilities and attorney on and off, they do. They take all of the basic requests and arrange for handyman and all that. I still approve budgets and all that. But my advice to folks that are doing that is you do have to pick one, like, it’s okay to self manage. And there’s a good education in that. And it’ll help you manage a property manager a little later on whenever you want to go that route. But at the end of the day, if you really want to be as passive as you possibly can. Like there’s, in most major markets, there’s flat fee, or just flat fee per door, property management companies that you can turn it over to. You still have to manage them, though. Like, yeah, you’re an asset manager.
Vlad Arakcheyev 22:03
That’s true. Yeah, we budgeted about 8% for property management, just in case we would get one.
Chris Bounds 22:11
And that’s really, really smart. So that way, it’s there. I’m gonna keep it for now. And then at some later point in time, you at least have it built into the budget that you can afford it if you need it. Now you decided to dump it not or not dump it, you sold it, you move it over to multifamily. And so are you full time at this point?
Vlad Arakcheyev 22:35
Here I am. I resigned in December not this December. But last December of two years ago, almost How
Chris Bounds 22:44
did you come to that decision of after so long being in corporate America getting that steady paycheck? Like how did you? How did you within your family like with your wife, and that those conversations and also, in your own head? Be like, this is it I’m gone? I’m jumping into Yeah,
Vlad Arakcheyev 23:00
my wife was actually very encouraging and behind me 100% I’m without her I wouldn’t be here, we wouldn’t be here. But what really changed, she was like you got just resigned. But I was afraid is just pure fear. And then because the fear of unknown maybe it was just different factors. But like I mentioned, if you are on a DISC personality test, I’m a green. So I’m a safe person. I want to know where my next check is coming from. And if I resign, that means I’m like, That’s it burning the bridges. No more cannot go back. And I mean, like you could,
Chris Bounds 23:41
but your mentality is you couldn’t. But in reality, you can always get another job. Right. Exactly. That wasn’t that wasn’t that wasn’t what you’re wrestling with at the time.
Vlad Arakcheyev 23:53
Yeah, it was all my head is that’s that’s the biggest thing. But what really turned me over and made me change. And resigned. I started losing deals. Because nine to five, right? So I’m locking up a house and I’m going I remember this conversation. It was Wednesday. So I spoke with a seller, great house and they said, Listen, we agreed on the price agreed on terms on everything. I’m like, I’m gonna stop by and Friday. Check it out. We’re gonna sign the contract. And that’s it.
And the guy was like, yeah, absolutely. I like your price. I like everything. All is done. No problem whatsoever. Now on Thursday, I’m calling him back just to confirm that I’m coming in on Friday and he goes, somebody else just stopped in and I signed the contract pretty much for the same price as you and I, you know, my wife liked the guy. I liked them. There was no reason to wait. And it happened three times. So after the third time, I’m thinking how much in potential income I lost.
Chris Bounds 24:58
You just want to finish figure It’s quite out the window because you’re assigning to a paycheck.
Vlad Arakcheyev 25:04
Yeah, possibly. Yeah, it could be anything I could have wholesale had gotten quick 15 10,000 or flipped it and God 50 to 80,000. Who knew? I didn’t know those three of those deals. And during lunch, I call my wife. And I said, Can you send me a resignation letter? And she was like, what? I’m like, just send me the letter. I had it within 30 seconds in the mailbox, and that it into my supervisor. Two weeks later, I was gone. Wow, wow. Well,
Vlad Arakcheyev 25:38
no, ultimately,
Chris Bounds 25:39
it was a process you had to get there. And, you know, it just took those lessons where you saw the opportunity cost. And it’s like, as opposed to losing something like quitting your job, you’re actually losing something by not quitting.
Vlad Arakcheyev 25:54
Naturally, I couldn’t put two and two together. And you know, a lot of people said, I read Kiyosaki his book, Rich Dad, Poor Dad, and it opened their eyes and stuff like that, and everything clicked into place. I read the book, too. It was great. But I could not picture in my head how to do it. Like I understand what he was talking about. It’s great divisions there. I just didn’t have it. I was not mentally prepared for this. I was too much into corporate culture. I was thinking, I’m thinking of bonuses or thinking of winter vacations, without thinking any they can be a vacation. I don’t have to wait till winter. I don’t have to wait for bonus time to get a bonus. I can get bonus at any time.
And additionally would really open my eyes as you earn your vacation, right? But you still have to go to your supervisor and say, Can they take this vacation? And they can say no, it’s the busy season. You cannot take it during July, for example, or during winter time because we have a rollout. So you can’t take it you have to old bunch up your vacations in November or something like that. So if you earned it, why do you have to ask people for vacations? And that really kind of clicked in and one person said it to me. They’re like, Why do you have to ask for your vacation? You’ve earned it. And I’m like, Oh, my God, this guy’s absolutely right. Why? So all of these things are combination, plus losing deals. Just I was like, That’s it?
Chris Bounds 27:30
Yeah, I think for me, I was always going to be an entrepreneur, I just had a very, I was comfortable. And the thing that gets in the way of a great life is a good life. So I had a good life was working from home typing and sales job. And working from home gave me a lot of latitude. And still still being able to invest in real estate. For me, it wasn’t until they cut my pay and you know, in half, and at that point, it was just like, well, it’s just not worth it. Well, that and then also I had like my wife and I we had to six figure paydays with some of our investments.
And so it was like, okay, to six bigger paydays. I lost half my income over here. And I’m like, I don’t really need this anymore. But I mean, we all find the path. And I think it is very important to note that not everyone needs to quit their job or wants to or should because not everyone is not in everyone’s capacity to be self employed to run their own business or start your own business or whatever. But be, and if you’re if you’re younger ish. It might be worth the risk, because you can always go get a job. And that’s ultimately what it came down to me was, I knew, hey, this is a great job of getting good money. It was very flexible, but worse can worse. Worse thing. I can always get another one. Yeah.
Vlad Arakcheyev 28:59
Yeah, I was just, I was kind of done after I saw the potential and especially I was going to let on networking events here in New Jersey, and also on Zoom events now. So I was on Zoom calls all the time. And you know, all that energy got rubbed off on me from other investors from other syndicators from other realtors even because I see them driving up and down the road at any time. And I’m like, Well, I have to be stuck in the office. I didn’t want to do that anymore, because I tasted it. Yeah, right. They saw it already. And I’m like, yeah, let me try something else.
Chris Bounds 29:37
Yeah, you felt handicap man.
Vlad Arakcheyev 29:38
I did. But it like I said, without my wife, I wouldn’t be able to do this. And her support means absolutely everything. She pushed me towards this and I’m so glad she was persistent enough for six months to push me towards this thing she was she she she tried to find me a pain point, you know, like, when you’re a flipper, you’re trying to find sellers pain point is the same thing here. And the pain point was in my case, it was freedom of time. And of course, tax savings, when I got the idea of being an active participant in the passive activity that kind of clicked and I started reading more about it, then the, you know, everything just fallen into one bucket there from all the directions. So
Chris Bounds 30:28
and that’s really important, and it shouldn’t be glossed over to have the buy in from your spouse. And it doesn’t necessarily mean your spouse has to fully support exactly what you’re doing, but support your enthusiasm behind it, and at least give you the ability in the room and the flexibility to, to run with that and to test those, those ideas or adventures or whatever. And yeah, I think as guys, you know, we’re kind of naturally inclined to build things and to create things. And I mean, definitely, ladies do that, too. But um, so she, it’s definitely very good that she was she was very supportive, and you were doing this specific thing. But even if your spouse is maybe a little bit more cautious.
So my wife she was she was a little bit more cautious. She was this was she is not entrepreneurial at all. She’s very, very safe, very steady, comfortable. But she was willing to support me behind my ventures. And then she even went along with it. And then she realized, oh, wow, this thing actually works and then started working in the business and whatnot. So I think I think that’s important. So all right, your full time real estate, and you’ve had your taste at single family flipping wholesaling, single family rentals, decided to you need to go bigger, and that’s how you get into land development multifamily, or was it first multifamily and then then land to build one?
Vlad Arakcheyev 31:59
Yeah, multifamily. When it comes to land development? We’re actually by I guess, accident, I should say, or lucky accident.
Chris Bounds 32:07
Okay, moving in the multifamily direction at this point. Yeah,
Vlad Arakcheyev 32:11
it’s all multifamily. The thing is, we were buying a seven units of set in Brandon, it’s outside of Sarasota. And without actually realizing we bought seven units, but eight acres of land was attached to the property. And we realized the potential of it, the potential was to rezone it for multifamily and build 96 apartments. So I didn’t plan a one to be in land development, and they still am not sure what’s going to happen there. It’s a small JV, we’ve done it with five other friends. And the value is not in apartments, it’s in the land. So we can rezone sell or rezone partner with a developer or just do it ourselves, raise enough capital partner what a developer build, so we’re not sure what we’re gonna do yet we’re in the process of rezoning. It shouldn’t be done by October of this year. And then we’ll, we’ll see how the market is going to be and, you know, we really not sure of the exit strategy, these are the two potential exits that we are considering right now.
Chris Bounds 33:22
Yeah, I mean, that’s good, you have options. So, you know, if you were to redevelop, or just develop them, you know, that’s and that pans out, that’s great. But the ability just to sell the land since that’s where a majority of the value is currently, you know, presumably, you can take that to either pay off debt or you know, you know, return capital to any investors you have like yourselves or any other investors and use those proceeds for other opportunities. So, multiple exit strategies, I love it. I tell folks like flipping two’s like especially in this market, like you’re gonna flip like make sure it cash flows if you have to give us his rental asked me how I know that. I’ve had some flips that didn’t quite sell for what I needed needed to so the rentals now and eventually Tom makes those bad deals. Makes them okay. Yeah,
Vlad Arakcheyev 34:13
it works out. It works out but I strictly focus on multifamily because it’s my thought my my thought is this basic human need, right? Food, clothing, apartments, people got to live somewhere. So if they have to, if they cannot buy they have to rent, they’re not going to be homeless. So just providing a service here, and that’s why I strictly focused on departments. I don’t want to spread myself too thin. Be very focused in one market in one area like in Texas, Houston, Dallas, right? I’m not going to venture out anywhere else I by I want to know everything in that market, everything in that area, and specific by box, not just jumping all over the place, but really, really focused on a particular thing. And so we can execute our plan.
Chris Bounds 35:06
Love it, love it. So tell me about your first large multifamily deal.
Vlad Arakcheyev 35:12
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 code GPO 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 co GP, how about you speak with the operators and try to raise capital and 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 five or six 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 had 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 don’t you try your friends and family. Not a single of my friend 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 are not investing in the deal they investing in you. So they just didn’t believe you that you could execute this that you 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 they said, Hey, listen, we’d have this deal. We accept 1030 ones. Do you would you like to take a look at it? And he said yes, sure. So long story short, he had $1,000,000.10 31. And he took the deal. And less so with one person, I managed to raise a million with the 1031. 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 and the tenants in 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 indication was. I consider that a success. Up until you’re ready for this. Two weeks before closing. And the capital last September, the bank pulled out of the deal. Nothing. Yep. And I was already counting my money. I was super pumped, which is not really,
Chris Bounds 38:49
um, has not been uncommon, unfortunately, over the last six, nine months or so with rising interest rates. But yeah, go ahead.
Vlad Arakcheyev 38:56
Yeah, the the rates started shooting up by 75 basis points every month, bank 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 40:18
We’re able to do any get that get that investor in any other opportunities?
Vlad Arakcheyev 40:23
Yes, absolutely. Yeah. Yeah, we got that investor into another opportunity in Dallas. So it just shows you
Chris Bounds 40:30
like, when you keep chipping away, like one person, one event, one act, just one thing, can totally start tipping the dominoes and tip and everything’s in your direction. It’s just don’t quit your three threatening all people know the story about three feet from gold. You’re three feet from golf to keep digging. So how’d you stop getting frustrated? You may not have ever got connected with that one investor, because 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 other 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 there’s definitely rules on raising money, what you can do what you can’t do, it’s going on the title of the deal. And that was six beef, I will succeed as a 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 41:51
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 in 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. We’re at 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, closed 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 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 JVs also won 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 will try and go for midterm rental to cater to traveling nurses. Because there is 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 year, I don’t know anything, which is it’s a buzzword
Chris Bounds 43:51
that this whole midterm rental and you’re 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 place now. So I don’t know if it’s just like 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. So
Vlad Arakcheyev 44:26
interesting. Interesting.
Vlad Arakcheyev 44:27
Awesome. Yeah. So it’s, it’s after the first deal that might be considered, you know, a failure, but not not not to meet this, this happened for me, I believe not to me, and it really accelerated everything. And really what
Chris Bounds 44:47
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 the entity documents working with the attorneys, the insurance, the the bank, and the sellers 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 when folks can be the same words, but that confidence really, people pick up on it.
Vlad Arakcheyev 45:45
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 kinda 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 it. The question is, basically, to see if you’re legitimate if you’re a real buyer. And that even though what to what to answer it 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’ve had everything ready. So by then, everything got incredibly easier because I got my reps and they got, you know, I got to practice on somebody on on somebody in a different market.
Chris Bounds 47:20
I love that new and you can do that. And a whole bunch of different things with sales or negotiation, just in that safe zone on negotiating a discount for your Starbucks or for oil change. It’s very, very safe zones where there’s no penalties, it’s not really going to affect you, as you learn but so you’re doing that in other markets and that way you’re you’re a little bit more experienced when you go into the market that you really want to be in a lot of it. Well yeah,
Vlad Arakcheyev 47:47
cuz, you know, people be like, oh, yeah, I know that lad. He doesn’t know anything. Yeah, no, but that was back in the day. You know, of course, now things changed. And as you get more experience, you get more confidence, you know what you’re talking about? And And mind you, the community is so tiny. Everybody knows everybody. Yes. And the funniest thing is I was just speaking on a panel in the in the Hilton Hotel, and I was interviewing Matt Puccini and, and he’s talking about loan assumptions. And he’s speaking and giving an example how he sold the property just recently in northeast Dallas, to another team, and another team assumed his loan.
And he’s he didn’t say the name, but he said northeast Dallas 419 doors. And he even kind of hinted on the the rate, and I kind of interrupted the whole panel. And they turned to him when they say Hey, Matt, are you talking about McCallum communities? And he’s like, yeah, how do you know? It was like, because we bought it. And the whole audience like 200, people just dropped and started clapping their mouth just like open. They’re like, was this like planned? We’re like, No, it wasn’t, I didn’t know Matt was the seller. I really didn’t. So it’s a really, really tiny community.
And everybody knows everybody. So when you speaking with brokers, and you drop a couple of names here and there, people who you work with, or who you heard of, or saw on Zoom calls events on anywhere, they’ll they’ll already know that you know what you’re talking about you in the space. So they’ll take you more seriously.
Chris Bounds 49:35
Yeah, and that’s also a good reminder to keep your integrity on the high end. Do what you say you’re gonna do is we’re travels fast and less that you want to do is get blacklisted early in your career.
Vlad Arakcheyev 49:50
Yeah, that’s the biggest thing because people people know people. It’s a it’s a tiny, tiny community. If you think about it, this A handful of very large operators, especially in in the Texas market. And then of course, there’s multiple others, but everybody knows everybody. And we all network at the same events, we go to the same brokers, same lenders, same cost segregation professionals, and you know, I can name a call set guy, and I’m sure 99% of multifamily operators will know. So it’s, it’s, it’s a very small world.
Chris Bounds 50:28
Love it over these next few questions as we close it out and ask every guest that comes on the show. First one being if you could give advice to your 20 year, your 20 year old self, what would that be?
Vlad Arakcheyev 50:41
I would ripped up PlayStation out of the wall. and I were like, What are you doing, stop wasting your time, read books, stop watching TV, read books. And most importantly, don’t be afraid to take action. I was really, really afraid to get out of my comfort zone. And that’s exactly what you need to do. So learning how to be uncomfortable and being comfortable with being uncomfortable. That’s where you have to be. So I would tell younger, self, get out there as much as possible and start educating, I would never imagine that I would be self employed, or owning real estate or anything like that. So I would just give myself some advice and just go for it. Don’t be afraid, just go for it.
Chris Bounds 51:35
I mean, what book or books have greatly influenced your life?
Vlad Arakcheyev 51:39
Yeah, when it comes to books I’ve read, I’m actually reading three books now. One is The One Thing by Gary Keller, and why I’m reading those books because I think I’m in the stage where I have to focus. You can you can buy things you can, you can grow. But at the same time, while I’m trying to be a business person, right, I am a business person. So you have to change your thinking you have to change your mind. So for that, you need to change your focus, and go deep on what you’re doing. Instead of spreading yourself too thin, concentrate on what you’re really, really good at and delegate.
So one of the things is with The One Thing by Gary Keller, another one, I’m a huge fan of Benjamin Hardy, he’s written who not how, and be a future self. And his new book, it didn’t come out yet, but I had an opportunity to read it. It’s 10x easier than 2x. So he’s talking about eliminating 80% of the busy work, quote unquote, and concentrating and 20% that’s going to grow your business tenfold. So that’s exactly what I’m working on now. So please read the one thing, and also be a future self. It really kind of puts your mind at that perspective where put yourself 20 years ahead. Now bring it back to right now what do you need to do now to be that like that person in 20 years. So it’s it’s a really interesting concept, he explains it better, he’s a doctor.
Chris Bounds 53:21
And the last five years what new belief behavior or habit has most improved your life? Last Five
Vlad Arakcheyev 53:27
Years, I would say few, I’m not gonna say one. It’s a combination, because I started them at the same time. So I blocked out my day. So I’m very, very focused when it comes to blocking out the day. So in the morning, when they wake up meditation, journaling, to kind of get stuff out of my brain and put it on a piece of paper,
Vlad Arakcheyev 53:57
exercising. So all those four things I started at the same time. I don’t know what weighs more, what works more, but I’m doing all these things. So basically before 9am And I know it’s late, I know people wake up at like four and do these at four in the morning. I’m not a super morning person, even though I shouldn’t say that. I know it’s kind of a cliche type of thing, but I don’t like a I go to bed at 1030 I wake up at six. So before nine I do all these things to prepare my mind. Additionally, even if you do one, exercise or journaling. You already accomplished something that early in the day it Yeah, it sets your mind right that sets your day, right? You’d be like you know what? It’s 8am at 7am I already accomplished something. I already accomplished two things. So these are the things that really helped me exercise yoga meditation and
Vlad Arakcheyev 55:00
I’m journaling. How can people reach out to you? Oh, I’m
Vlad Arakcheyev 55:04
all over social media. I’m Vlad araqchi If there’s not many rock chefs out there. So I’m on Facebook, LinkedIn, Instagram, I’m about to start my YouTube channel. I’m all about education. I’m, you know, I’m thinking back to that conference where all these people were just giving back and teaching and saying, Hey, listen, you can have this. If you want to be passive be passive, that’s perfectly okay. But be in it. Because it’s a really, really cool vehicle to build wealth, build passive income, and of course, taxes. So it’s, it’s a huge, huge opportunity. So I’m out there, basically screaming and saying, take a shot, take an opportunity, vet your partner that you’re the operators, of course, ask a question. Just ask a question. Be curious. And it’s going to be 100%. Better. I guarantee it. Monnet. Well, thank
Chris Bounds 56:06
you so much lab. It was good having you on and look forward to checking out your YouTube channel once you launch that, and yeah, hopefully we can connect at one of these upcoming events soon. Yeah, it’s
Vlad Arakcheyev 56:16
gonna be definitely interesting. You know what I’m doing? You’re ready. One, one last second novel real estate. My passion is motorcycles as well. So I’m gonna do real estate and motorcycles. I love
Chris Bounds 56:27
it. Yeah. Give me your niche. And, I mean, there’s so many ways you could do that. Like, I’m, I’m big into fitness. So I’m starting to weave a little bit more of that into my stuff. So I love it. So for the the motorheads out there. I’m sure they’re really connect with you.
Vlad Arakcheyev 56:46
I know. Thank you so much. I really appreciate the opportunity.
Chris Bounds 56:49
Absolutely. Thanks for coming on. Thank you. Thanks for tuning in. If you got any value out of this at all, please like comment, subscribe, follow and love to hear from you. And for more real estate related content, market observations, upcoming events, you can go to invested x.com And subscribe to our weekly newsletter. I promise you won’t regret it. Thanks again.