Ep #157 – Abhi Golhar – Electrical Engineer Turned Real Estate Investor, Host Real Estate Deal Talk

Here’s some of what you will learn:
⦁ How to get over the fear of selling yourself.

⦁ What mentors can do to help you be successful in this business.

⦁ “I invest in business for lifestyle. I invest in real estate for wealth.” – Abhi  Golhar

⦁ Why you should develop businesses to generate income to invest in real estate.

⦁ How owning multiple businesses have tax benefits.

⦁ Why people’s inability to execute is the reason why they are not successful .

⦁ The importance of mindset when investing.

⦁ The importance of investing in a secondary market.

⦁ Make sure you vet your lenders just as much as they vet you.

⦁ How networking can land one of your largest deals.

⦁ This is a relationship business and you must learn how to build and keep relationships for life.

⦁ Why you shouldn’t advertise to syndication unless you have a previous relationship.

⦁ How to find your why in this business.

⦁ When buying your first property, why you should be cautious and not jump the gun too quickly.

⦁ Why you should be patient when looking into your first deal.

⦁ How to find out what type of investor you are.

⦁ When you find out what type of investor you are, that will help you build your business better.

⦁ Book recommendation: Power vs. Force by David R. Hawkins M.D.  Ph.D.

Watch on YouTube

Do you want to learn more about Multifamily Real Estate Investing? Work with Rod in the Lifetime CashFlow Academy's Multifamily Course & Coaching Program

Full Transcript Below:

Ep #157 – Electrical Engineer Turned Real Estate Investor | Rod Khleif & Abhi Golhar

Welcome. This is the Lifetime Cash Flow Through Real Estate Investing Podcast. This is where you’ll learn strategies to help you achieve lifetime financial freedom through real estate investment. Your host, Rod Khleif, has owned over 2,000 homes and apartments. And he brings experts in all aspects of real estate investment and management on to the show. Now, here’s your host, Rod Khleif.

Rod Khleif: Okay, just a couple of quick things, you guys know I’m a huge proponent of mindset and the psychology of taking action. How it’s my belief that 80% of your success in anything is your psychology and your mindset. Really, 20% is the mechanical stuff, the real estate knowledge. I even, recently, did a Facebook Live clip on creating vision boards, and how do you use those to get your goals and things you want.

Well, you guys aren’t gonna believe this. You’re gonna absolutely love who I’ve got coming on the show on September 25th, John Assaraf from The Secret. He’s the guy that showed us his vision boards in the blockbuster movie The Secret. In fact, he’s the reason millions of people now have vision boards. John is that guy. So make sure you check out that episode on September 25th. It will be epic.

I’ve finally launched my course and coaching program. If you’re interested in this business at all, I can humbly say, it’s the best multi-family course out there. I personally coach you on how to crush it in this business and in your lives. If you wanna get more information on my course and coaching text the word CRUSH to 41411.

Last, I’ve created an incredible Facebook group for you guys. If you’re interested multi-family investing at all, already over 800 people on it; I’m sure it’ll be a thousand here shortly and it’s very active. All you have to do is go to multifamilycommunity.com and it’s a direct link to the page. So go sign up and you can peer mentor and learn from each other. It’s just an incredible environment… Alright, let’s get to it.

Rod Khleif: Welcome to another edition of How to Build Lifetime Cash Flow to Real Estate Investing. I’m Rod Khleif, and I’m thrilled you’re here. I know you’re gonna enjoy the guy that we’re interviewing today. Super high energy, very successful, and has his own radio show called The Real Estate Deal Talk. His name is Abhi Golhar.

First read the book, Rich Dad, Poor Dad, like the rest of us and now he’s very, very successful in three markets: Atlanta, Charlotte, and Dallas, and focuses on value-add properties. We’re excited to have him on the show. Abhi, thanks for being here, brother.

Abhi Golhar: Alright, thanks for having me, Rod. Looking forward to it.

Rod Khleif: Absolutely. So that was a very weak introduction, I want you to take the time to tell us who you are and where you started. and take it away. Take the mic.

Abhi Golhar: Yeah. You got humble beginnings, is where I started. I grew up in a really small town called Portage, Michigan. When I was growing up, I was probably… I think the city was maybe 50-60 thousand. For me that’s small.

Then I ended up moving to Atlanta in 2007. But the time from when I left my parent’s house to go to Michigan, pursue my four-year degree in electrical engineering, to finishing that degree was very, very, very difficult.

I knew I had a knack for problem solving, and engineering skills, and this kind of stuff, but I also really didn’t like that world. Because during my growth in college I discovered, “Hey, I have a personality.”

Rod Khleif: Right.

Abhi Golhar: And I love real estate, and I wanted to build wealth, instead of just being a desk monkey for somebody. And again, there’s nothing wrong with that in any stretch of the imagination. I have friends that do really well as being, even entrepreneurs in their organizations and for their companies.

But for me, it just wasn’t my thing, so I started investing in myself. I read a lot of books, the one that you mentioned, Rich Dad, Poor Dad, Think And Grow Rich by Napoleon Hill, Acres of Diamonds, so that first… What was it? Freshman year, that summer, I read so much, owned everything from the Stanley’s… I have an entire library here that I just read.

And I thought to myself, what do I need to do to invest in real estate? One of the things that I noticed was I needed skin in the game. This was back in 2002-2003, when you could get your ninja loans. Right? Your no income, no job applications and you can get approved for that.

But I didn’t want to go that route. I needed cash. I wanted to invest properly. What I started doing was I found… One of my mentors kind of taught me this a little business and I found classic cars on Craigslist. So if you have like a… My all-time favorite car is a 1967 Ford Mustang, GT Fastback with a 4-barrel 289 V8 engine.

Rod Khleif: Love it. Love it. Love it.

Abhi Golhar: I found these cars on Craigslist and I resold them on eBay, and I was part of like this mass export of classic cars to Australia, to the UK, to France. And that’s how I built my little nest egg or my real estate fund for myself. Just in a bank account, just a checking account. That’s how I got my start.

I took that and invested in two projects in inner city Detroit, realized that I didn’t know what I was doing… Both of those projects flopped. Lost a little bit of money on both projects. Was lucky to be able to wholesale them out.

Rod Khleif: When was this? What year was this, Abhi?

Abhi Golhar: This was 2006.

Rod Khleif: Okay, before the crash. Got it. Okay.

Abhi Golhar: Yeah. Before the crash, which is… I don’t know if I should laugh. I definitely laugh at myself now but it’s kinda terrible. Right? Like everybody’s making money in real estate and I’m the only person that’s losing money during this time. [chuckles]

Rod Khleif: Well you were in Detroit though, and I’m gonna have hate mail for that comment but that was a tough market back then.

Abhi Golhar: Yeah.

Rod Khleif: And still is, it means it’s evolving now that Quicken Loans is… That guy is spending a lot of money there, but… Okay. Continue.

Abhi Golhar: Yeah. So I got out of those projects, and the moment that I realize that I didn’t know what I was doing was this. I got a text message for my contractor and he said, “Listen, you need to go at inner city Detroit.” This was right when it started snowing.

I got this text message as I was finishing class, roughly around 7:00 or eight o’clock. Labs were done. Group assignments were done. He sends me this text, says, “Hey, you gotta get to your project, I’ve left a ShopVac for you.”

You’ll meet me in person, Rod, I mean I’m 5 foot 5, a 120 pounds. So I know what a ShopVac is…

Rod Khleif: Soaking wet. Right?

[laughter]

Abhi Golhar: Right… I mean I know what ShopVac, I know what a sledgehammer is, but I’m not gonna pick one up. That’s just not my kind of thing.    

So I have this 1992 used Honda Civic DX, this little hatchback, bald tires car. My parents didn’t even know… Mom and dad did not even know I had a car in college. But I had this car, and I drove it to Detroit. As I was leaving Ann Arbor, it was just starting to snow. When I got to Detroit, it was a full on blizzard. I pull into my rental that I was rehabbing at that time. I go downstairs, I hear running water, and then I’m like neck-deep in water. It’s ridiculous. I’m like, “Okay, now I know what the ShopVac is for.

Rod Khleif: [chuckles]

Abhi Golhar: In that moment though, I was cold, I went to sleep that night… Like I had no mattress. I had no bed. I had nothing. Just my mindset of, “Holy cow, I am screwed.” But also knowing that I could only go up from here, and that’s what excited me a little bit. It was…

Rod Khleif: This was a place in Detroit…

Abhi Golhar: Yes.

Rod Khleif: And the water, the lines had broke because they froze…

Abhi Golhar: Yeah.

Rod Khleif: And you’ve got water. God, if I could count the times that’s happened to me… If I got a dollar for every time that’s happened to me.

Abhi Golhar: [chuckles]

Rod Khleif: Yeah. But that’s… At least you didn’t let it dissuade you.

Abhi Golhar: Yeah.

Rod Khleif: Many times, when that happens initially in somebody’s real estate investing career, that’s it for them. They think that’s how it is, and it’s not how it is. Sure it happens, but you just shake it off and move on.

Abhi Golhar: Yep. Yep. Yep. And that’s how I started.

Rod Khleif: Okay.

Abhi Golhar: Both my parents are immigrants and my dad came here on a scholarship from India. He graduated from Michigan. The same school I went to, with a PhD in IOE. He subsequently was a professor and he’s been teaching since 83 at Western Michigan at Kalamazoo.

So my mindset growing up was, “Okay. Got to study hard. Got to get good grades. Good job.” Just like what Kiyosaki talks about in Rich Dad, Poor Dad, and all the subsequent books that he’s written. I’m like, “Wow.” It’s really hard for me to identify with that mindset.

Every time, I used to ask my dad about like stocks, or investing, he always used to say, “Hey, you know what? You have a mutual fund. You’re investing in the IRA…

Rod Khleif: [laughter]

Abhi Golhar: But you don’t have to worry about it. You don’t have to think.

Rod Khleif: “You just focus on your career, son.”

Abhi Golhar: Yeah!

Rod Khleif: Now, I had a father that was a PhD as well and that’s the mindset.

Abhi Golhar: Yep.

Rod Khleif: It is what it is.

Abhi Golhar: Yep.

Rod Khleif: You’re brought up that way and there’s a comfort to it. Unfortunately, my stepfather was employed for 30 years with Continental Airlines and he thought that was job security, then they laid him off. Guys, those of you listening, the only job security is between your ears.

Abhi Golhar: That’s right.

Rod Khleif: So continue.

Abhi Golhar: Yeah.

Rod Khleif: You started, and now look at you. I know that you’ve got an excess of a $15 million portfolio in multi-family. You’ve got this syndicated radio show. Fill in the blanks. What else has happened? What got you to where you are now?

Abhi Golhar: I landed in Atlanta. I kinda did the horseshoe in the Midwest. So I went from Ann Arbor to Lincoln, Nebraska… Long kind of ex-girlfriend story…

Rod Khleif: [chuckles]

Abhi Golhar: And then I moved to… I’m like the hopeless romantic, alright. That’s kind of the way that I used to roll back in the day. So Lincoln, Nebraska, I sent a lot of letters of Warren Buffet and that clearly didn’t work.

Then I moved to St Louis, again, followed my mentors. At the time, learned… But whenever I was moving, I was always learning about real estate. And I was really scared of entering back in after my Detroit challenge.

When I moved to Lincoln, I found this guy Andy. He is, I think Vietnamese, and he had this portfolio of single-family homes. He had like 110 or 120 of them. I’m like, “Andy, how are you doing what you’re doing brother? I barely understand your English.” But he just…

He was rocking and rolling man. It was so awesome to see that. And he helped me get over the fear of knocking on doors, and just selling myself, and saying, “You know what? What do you have for sale? Do you know anybody in the neighborhood that’s selling?”

[00:10:01]

Abhi Golhar: “What you got?” That’s what helped me kinda get back in the bandwagon.

Rod Khleif: Seeing somebody else successfully doing it.

Abhi Golhar: Absolutely.

Rod Khleif: I’m really glad you brought that up, about the fact that he was difficult to understand: He maybe had a heavy accent…

Abhi Golhar: Yeah.

Rod Khleif: I talked to people that have that situation and I’m really glad that you brought to light his success. Because it’s only a hindrance if you believe it’s a hindrance.

Abhi Golhar: Boom! That’s right.

Rod Khleif: And so, right now, I’m really glad you brought that up and hopefully the people that I’ve had conversations with recently; hey listen to this episode because you know who you are. Please realize that it’s what you believe. It’s your belief systems. There’s a reason belief systems, its acronym is BS.

Abhi Golhar: [chuckles]

Rod Khleif: So that’s important that you recognize that.

Abhi Golhar: That’s right.

Rod Khleif: Why did you start real estate? Was it the Rich Dad, Poor Dad book? Is that what got you going?

Abhi Golhar: I realized that real estate… There are two things that I firmly believe. I’m a student of life. If there’s one thing that I know, it’s that I don’t know everything.

It was only a couple weeks ago, where I kinda put two and two together. I invest in businesses for lifestyle. I invest in real estate for wealth.

Rod Khleif: I love it. Love that. I’m gonna steal that quote. Love that.

Abhi Golhar: Go for it.

Rod Khleif: Yeah.

Abhi Golhar: It just blew my mind when I put this together. I’m like, “Oh my gosh,” ‘cause I’m…

Look at the history. I’m an electrical engineer so I’m kinda like Iron Man. Right? It’s like I can take a process that’s kind of fumbling, and it’s bad. And I can remove all the toxic processes and make it better. Whether it’s a product, whether it’s a service, whether it’s a business process, whether it’s people, it doesn’t matter what it is I can make it better.

So in doing so, I realize, “Wow, I have this super cool talent. The same thing on the real estate side, and for me, I’m, again, I’m 5 foot 5, 120 pounds. I don’t necessarily have to do the work, but I can empower people around me to do that work. To do the best quality work that they can do, so that we can cumulatively achieve a result that’s above and beyond what we’re generally getting in the market.

Am I saying we never have problems? Absolutely not. Like I keep going through contractors every now and then, just to find that one or two or three…

Rod Khleif: That’s always a challenge, contractors. That’s part of this business guys.

Abhi Golhar: Absolutely.

Rod Khleif: Those of you, if you haven’t encountered that in your real estate career, yet you will.

Abhi Golhar: Yeah.

Rod Khleif: And it’s just is what it is. And I love that quote. You’ve develop businesses or built businesses, or been involved in businesses to generate income. That you utilized to invest in real estate.

Most of the super successful people in real estate have started or continue that path. Anybody that’s intelligent takes their money they make from other opportunities, put’s some in real estate, if nothing else just for the tax benefits.

Abhi Golhar: Yes… Right.

Rod Khleif: Forgetting all the other benefits… Why did you start the real estate radio show? The Real Estate Deal Talk.

Abhi Golhar: I think it’s everything that you and I are talking about here.

Rod Khleif: Okay.

Abhi Golhar: Rod, I was so frustrated. I used to go to seminar after seminar, after oh my gosh like…

Rod Khleif: Right.

Abhi Golhar: Until my ears were bleeding, and the one thing, the one thing that I noticed, people could never take away… The reason that they were never successful is because their inability to execute.

Rod Khleif: I love it. I love it.

Abhi Golhar: And that just wasn’t taught. I’m like. “Why are you spending $35,000 for a Fur Bus tour of Phoenix, when you can partner with say anybody in that neighborhood, or anybody locally that you trust, that you say, build a relationship with a mentor that you jive with really well, and then you [overlap talk]

Rod Khleif: Absolutely. Use them as a sponsor and you’re off to the races.

Abhi Golhar: Absolutely.

Rod Khleif: Yeah, it really is mindset. You may not be aware that on my podcast, I do these little five to eight-minute clips on the psychology of success and taking action, because that really is 80% of it. I mean, 20% is the real estate stuff we’re talking about here, 80% is actually taking action. Actually getting outside your comfort zone, ‘cause the quality of your life relates to how far you can get outside of your comfort zone, and taking action.

I love it. I’m really glad to hear that’s why you started your show as well. That’s probably why you’re so successful. Good for you.

Abhi Golhar: It’s a lot of fun. I just got tired of people just getting burned by folks. And I started with nothing. Like I stared reading Rich Dad, Poor Dad, and then connecting with people, and then getting burned myself, and having the wrong mentors.

I’m like, “Wait a minute, if I can be just a resource for somebody else, you don’t have to work with me, you can’t hire me as a coach, I don’t have any programs, nothing. Everything that I’m doing whether the radio show, the podcast, or whatever, is just for you, so that you can learn whatever you need to learn and that’s it.

Rod Khleif: That’s awesome. That’s awesome.

Abhi Golhar: If you never get in touch with me, that’s cool too.

Rod Khleif: Yeah. That’s awesome. I love where your heart’s at and what’s driving you. And those of you guys, he’s got a great podcast as well as the radio show. So the radio show is… Is it with Wall Street Radio? That’s it?

Abhi Golhar: Yep. Wall Street Radio Network, yeah.

Rod Khleif: Okay, and then the podcast is Real Estate Deal Talk Podcast. Okay.

Abhi Golhar: You got it.

Rod Khleif: Fantastic… So let’s talk about due diligence. Speak to your thoughts on due diligence, and numbers and deals.

Abhi Golhar: Gosh, if there are two words that are just incredibly important. I love residential development, and I’ve now started getting into a lot more multi-family, just because that’s where the next progression of my acquisitions are. So when I’m looking at deals, there are a couple of important things that I look at.

One is the person that’s bringing me the deal. I need to know does this person understand the numbers? And are they presenting a package that makes sense. In the multi-family world, unlike the single-family world, brokers and folks that are bringing you deals don’t have to disclose anything.

In residential real estate, there’s disclosure, disclosure, disclosure, disclosure, disclosure. In the multi-family world, they can paint a deal that’s crap, to be a bed of roses, but it’s up to you to determine, “Wow, does this really make sense?” Because you can be buying something that just is bad investment.

Rod Khleif: Sure.

Abhi Golhar: In Atlanta right now, for example, you can go by the hub, you can go right by the airport, Hartsfield-Jackson. You can find the cap rate say, between seven and a half, and eight. But that’s unfortunate because those cap rates needs to be significantly higher. The risks there are significantly high and we’re also not talking about cap rates that are adjusted for cap ex.

One of my buddies purchased roughly about 100-unit apartment complex, right by the airport. Just the numbers for me didn’t make any sense. I’m looking at roughly 10 and a half to 12% cash on cash. I wanted an eight, eight and a quarter cap, and that’s it.

Rod Khleif: What’s your debt service coverage ratio minimum?

Abhi Golhar: 1.2

Rod Khleif: Okay. Well that’s less than mine. I mean that’s good though. I like the eight, eight plus cap, and I like the 10 to 12% cash on cash. Those are actually two of my minimums.

So where are you looking now? What markets are you targeting?

Abhi Golhar: I’m looking at your secondary market. So if you have Atlanta which is a primary market, anywhere 30-45 minutes of a drive not including traffic time; ‘cause Atlanta and can be a little crazy.

Rod Khleif: Sure.

Abhi Golhar: But 30 to 45 minutes of drive time, I’m looking in those secondary markets. I’m feeling right now, Atlanta. If you’re like in midtown or downtown…

Rod Khleif: No, forget it… I mean those cap rates are institutional grade.

Abhi Golhar: Yes.

Rod Khleif: I mean, they’re for a REIT that has no cost of funds. They can just go in there and buy at three or four cap, and they’re happy to have it and that’s it. But no, I get it. No, I love it. So 30 to 45 minutes out of the metro, and those of you that live in a big metro, i.e. a Phoenix, a Dallas, a Houston, an Atlanta. These are words of wisdom. That’s where you should be targeting, secondary…

Even beyond that, even tertiary, even smaller towns as long as they got enough of a population to sustain the property.

Abhi Golhar: Yep.

Rod Khleif: Let’s talk about wins and war story. Let’s come up with… Tell me about a victory, a super win and tell me about when you really got your… Besides the water up to over your head in the house, tell me about a war story where you got your nose bloody.

Abhi Golhar: I would say… So this is the residential deal. I’ll point to a residential deal.

Rod Khleif: Okay.

Abhi Golhar: In Atlanta, this was a lot that… Well, it was an existing house that we purchased in Old Fourth Ward. This was roughly about two and a half years ago. I think I did something about this, I can’t remember, roughly about two, two and a half years ago. It was on the corner of East and Fortune. This was when Old Fourth Ward was just heating up.

Rod Khleif: Okay… So this… I don’t know the area at all.

Abhi Golhar: Sure.

Rod Khleif: Is this an area that’s now gentrified or gentrifying, or

something?

Abhi Golhar: Yes.

Rod Khleif: Got it. Okay. Great.

Abhi Golhar: Yes. This is now a pretty much a fully gentrified area.

Rod Khleif: Yeah, fantastic opportunities guys, you’ve heard me talk about it a million times.

Abhi Golhar: Incredible.

Rod Khleif: If you can get in front of a gentrification, yeah, I mean, it’s a homerun.

Abhi Golhar: Absolutely.

Rod Khleif: So what happened? What went wrong?

Abhi Golhar: So I didn’t vet the lender as much as I wanted to. So the objective for this property was twofold; one, to acquire and redevelop, so we wanted to rezone it. We didn’t get the zoning that we wanted so we decided, “You know what, let’s go ahead…”

Rod Khleif: So when you say redevelop, were you gonna do another single-family, or were you gonna put multi-family…

Abhi Golhar: Yes.

Rod Khleif: Another single family.  So you were just gonna put…

Abhi Golhar: Another single-family.

Rod Khleif: A real nice single family, and sell it. Basically.

Abhi Golhar: You got it.

Rod Khleif: Okay.

Abhi Golhar: Yeah. It would be sold to retail.

Rod Khleif: Okay.

Abhi Golhar: It would be sold to a homeowner.

Rod Khleif: Sure. Sure.

Abhi Golhar: So we got all the way through the permitting process but I realized that, about half way through the permitting process, we started getting a couple of interesting questions from our lender.

The lender was out of the Northeast. Primarily a multi-family lender and this lender’s deal, this first… This single-family was this lender’s first new construction single-family deal outside of Northeast.

Rod Khleif: Period? Like ever?

Abhi Golhar: Ever.

Rod Khleif: Oh, geez… Oh, wow.

Abhi Golhar: And I didn’t ask that question.

Rod Khleif: Okay.

Abhi Golhar: Before I got into bed with the lender. So permitting times in Atlanta back then were super slow. Now, they’re a lot quicker.

Rod Khleif: Right.

[00:20:00]

Abhi Golhar: But it just took us a long time. We had to renegotiate everything. We got a lot of red lines back from the city saying, “You can’t have two car garage. You can only have one car garage. You can’t have these many floors, these many square feet. You can only do this, this, this, this.” Because they’re getting really, really restrictive on what you can do in Old Fourth Ward and what you couldn’t.

Rod Khleif: Okay.

Abhi Golhar: So back and forth, with the city. This lender says, “You know what, I’m tired of this. I don’t want to renew the note,” and we’re coming up. Our note was for 12 months, we’re coming up on eight or nine months. We said, “Listen, it’s gonna take a little bit of time. We’re giving you a head’s up. We’d like to renew.”

We had our deposit ready. We had the extension fee ready. They charged us about a .2 to extend. We said, “No big deal, because we believed in the project. Here are the numbers on the initial… when we bought it.”

Rod Khleif: Right.

Abhi Golhar: We bought it at two… The acquisition was 250.

Rod Khleif: Okay.

Abhi Golhar: We were going to build a 2200 square floor, three bed, two and a half bath, two floor modern for a total of $250,000.

Rod Khleif: So you’d have a half million in…

Abhi Golhar: Yep. Re-selling at 775.

Rod Khleif: Okay. Nice hit, I mean…

Abhi Golhar: Super easy.

Rod Khleif: Right. Had you done some of these before? Or was this the first…

Abhi Golhar: Yes.

Rod Khleif: You have. So you’ve raised and… Eliminated whatever’s on the land.

Abhi Golhar: Yeah.

Rod Khleif: So this was a model that was proven to you before.

Abhi Golhar: Yes, and that’s what we like.

Rod Khleif: Okay.

Abhi Golhar: We’ll kinda let the market kinda flush out where we need to be in terms of project scalability just how difficult the project is. Because if the market is too saturated with new investors, even like in multi-family right now, kinda like…

Rod Khleif: Oh, sure.

Abhi Golhar: You understand… Absolutely.

Rod Khleif: There’s gonna be a glut. And yeah, if you’ve got too many people building like your building but…

Abhi Golhar: Yeah.

Rod Khleif: So you did this model you primarily did in Atlanta?

Abhi Golhar: Yes.

Rod Khleif: In this particular area?

Abhi Golhar: Yes.

Rod Khleif: Okay.

Abhi Golhar: Exactly.

Rod Khleif: Okay.

Abhi Golhar: And this is East Atlanta, so you’re looking at Old Fourth Ward, Grant Park, Inman Park…

Rod Khleif: Okay.

Abhi Golhar: Kirkwood, so all these areas are really tied together and they’re seeing really good appreciation and value. So we thought, “Hey, you know what? This is gonna be the next hot area… “ [overlap talk]

Rod Khleif: So what happened? What was the end result with this lender?

Abhi Golhar: Okay, so we had… Man, it irritates me even today. We sold it off to a builder…

Rod Khleif: Okay, so you got out of it.

Abhi Golhar: We got out of it, just… It was 255…

Rod Khleif: And he made a fortune… Yeah, I already know where this is going, right? [laughter]

Abhi Golhar: Man…

Rod Khleif: Well I’m sorry… So what’s the lesson? What’s the lesson? Let’s leave the listeners with the lesson.

Abhi Golhar: The lesson is, just because lenders say they have what they have, make sure you vet your lenders, just as much as they vet you.

Rod Khleif: Love it. That’s great advice. Guys, absolutely great advice, and that’s a painful one. Alright, tell me about a win.

Abhi Golhar: I’d say the 200-unit in a little north of Dallas.

Rod Khleif: Okay.

Abhi Golhar: That was a good…

Rod Khleif: Now, you spot that recently, right?

Abhi Golhar: Yes. We closed on that in February.

Rod Khleif: Alright. Tell me about the deal. How’d you find it? Give us some specifics on it.

Abhi Golhar: Yeah, so one of the biggest things that I do, that I feel like a lot of folks need to start doing especially if you’re new is networking.

Rod Khleif: Okay.

Abhi Golhar: I have a really good team in Dallas, and we were a co-sponsor on this deal.

Rod Khleif: Okay.

Abhi Golhar: It was a 15.5 million acquisition and it was a broker; it was a good tightly knit broker relationship. Everything in real estate, just like you know Rod, is relationship driven.

Rod Khleif: Right.

Abhi Golhar: You have to have the right relationships. You have to be able to prove to them that you are serious and you know what you’re talking about. Not just using some templated email that you get from one of the coaching courses. Because the pros can sniff that out really fast.

Rod Khleif: Sure. 

Abhi Golhar: So you have to get on the phone…

Rod Khleif: You’re saying a lot of thing that I wanna stop for just a second.

Abhi Golhar: Sure. You go.

Rod Khleif: You guys have heard me say it a million times, this is a relationship business; it’s a relationship with the brokers. It’s a relationship with the bankers. And those relationships are worth their weight in gold.

You’re right. You don’t just send emails to brokers, you call them, and ideally, if you’re really on your game, you send them a hand written thank you note when they send you a deal that doesn’t work. You’re developing… You’re in this for the long game. You are building relationships for life.

It’s very, very important, especially in this hot market.

Abhi Golhar: Yep.

Rod Khleif: So you found this deal, you had a broker, you co-sponsored the deal with some other KPS involved, and you… 15 and a half million, and you’ve taken it down. Are you involved in the management at all or are you just an investor in the deal?

Abhi Golhar: Just an investor in the deal.

Rod Khleif: Okay.

Abhi Golhar: Yep, so I was able to help raise capital. We did a lot of conference calls, put together webinars. And we raised the capital that we needed. We needed roughly about 20-25% down.

Rod Khleif: Okay.

Abhi Golhar: And we spread that out across our list. We kinda did the quick little blast saying, “Hey listen, we have an interesting opportunity. Let us know what you think. Here’s the day and time for the webinar conference call. And these are investors that we’ve done business with before as well.”

Rod Khleif: I see. Okay, great.

Abhi Golhar: They’re pre-existing relationships, which is always a good thing.

Rod Khleif: Yeah, that’s a very important, very important point guys. You don’t advertise the syndication unless you’ve got a pre-existing relationship, unless you’re doing a 506 (c) to accredited investors.

Ahbi Golhar: Right

Rod Khleif: Okay, so…

Abhi Golhar: And you can also advertise with a Brag A [00:25:09] now. Right?

Rod Khleif: Yes, you can.

Abhi Golhar: I think.

Rod Khleif: Yes, you can

Abhi Golhar: That’s right.

Rod Khleif: Yes, you can.

Abhi Golhar: That’s more of the crowd-funding thing, I believe.

Rod Khleif: That’s right. It’s not as common but yes, it is. Absolutely in the crowd funding space, yes.

Okay, so let me ask you this, you are really, really driven, and I like to ask this question when I encounter people. I mean, you’ve done the cars. You’ve done the residential rent flips. You’ve developed and/or built other businesses to fund your real estate hunt. And now, you’re in multi-family. What’s your driver? What makes you jump out of bed in the morning?

Abhi Golhar: Family.

Rod Khleif: Family. Okay. Okay, so you…

Abhi Golhar: Family. Yep, family and freedom.

Rod Khleif: Freedom.

Abhi Golhar: Family is first, yeah.

Rod Khleif: Yeah.

Abhi Golhar: Family and freedom ‘cause I, man, I love… I’ll add to that. Family, freedom and giving back; otherwise, I wouldn’t do the radio show and stuff. Like I love my family. I want to have the freedom to spend, as much time with them, when I want, whenever I want, for however long I want.

Rod Khleif: Love it. That’s one of my favorite sayings. I love that.

Abhi Golhar: Yep.

Rod Khleif: I wanna be able to do whatever I want, whenever I want, wherever I want with whoever I want.

Abhi Golhar: Yes.

Rod Khleif: Love it. Love it.

Abhi Golhar: And the freedom to be able to choose.

Rod Khleif: Right.

Abhi Golhar: The freedom to be able to choose which deal I’m going to do, and not have to do a deal because I have to. There’s so many people right now, even when they’re raising capital, or even like institutional. Right?

Rod Khleif: Right. 

Abhi Golhar: Institutional… Google raised a hundred million bajillion dollars on Wall Street and say, “Hey, now I have to make buying decisions. But sometimes, they have to spend capital, otherwise they’ll be penalized for not using it, or they’ll look bad to their Wall Street investors. What happens as a result is what?

They’re making dumb buying decisions. And then they’ll pay somebody to put together a report of the hottest markets in Atlanta, one market or in the United States. Let’s say Atlanta’s a market where they made bad dime buying decisions. Atlanta just happens to be in that report just because they got to offload property.

The same thing I’ve seen with just your ma and pa, just even your first-time investors. They wanna get into a deal so bad, they’re willing to bid up, and bid up and bid up, and bid up. And then what happens?

Rod Khleif: Oh, they overpay. That’s how come auctions are so popular.

Abhi Golhar: Exactly.

Rod Khleif: They have very, very low opening bids. Everybody gets excited. They get caught in the fervor, and especially, guys, right now. Especially right now. You have to be careful.

If you get a property under contract, you absolutely, once you’re in due diligence, you need to be thinking to yourself, why do I not wanna do this deal? You need to make sure the numbers are right. You need to make sure you’ve got some minimums and that you stick with those minimums. Because commercial real estate, i.e. five units plus and multi-family is completely empirical.

It’s not an emotional purchase. I mean there are numbers aren’t right you don’t do the deal. All things being equal, of course, you’re looking at area, you’re looking at crime, you’re looking at demographics, and all that stuff but the numbers have to be there. Love it.

Abhi Golhar: Yeah. You got it.

Rod Khleif: What do you think is the biggest lesson you’ve ever learned? Was that the one that you just shared with me? Or is there another lesson?

Abhi Golhar: I would say be patient… I guess two.

Rod Khleif: Okay.

Abhi Golhar: Yeah, two. Be patient and be aware.

Rod Khleif: What do you mean by both of those. Please expand on both of those.

Abhi Golhar: So when I first started out investing in real estate, I guess alluding to what I talked about a little bit with wanting to do a deal so bad that I was willing to do anything, don’t do that.

Rod Khleif: Don’t do that. Just don’t do it. Just don’t do it. Okay.

Abhi Golhar: [chuckles]

Rod Khleif: Love it. Love it.

Abhi Golhar: Just don’t do it.

Rod Khleif: Alright.

Abhi Golhar: Just, just don’t do it.

Rod Khleif: Right.

Abhi Golhar: I would say, in terms of awareness, what type of investor are you? Are you the type of investor that will… Are you the adventurous type? Are you the type that says, “Wow, well, I really have no problem taking an obscene amount of risk, just to figure this out? Or maybe you’re a dentist that has a quarter of a million dollars in an IRA and you know you’re gonna have a check next week. So you can throw the 250,000 and something.

What type of investor are you? Are you the type of investor that’s going to just sit and you want a check every single month, from an apartment complex or from a single-family portfolio of rentals? Figuring that out will then make you a better investor for the long term.

And you’ll also, in turn, build a business in real estate and not a job in real estate. There are a lot of folks that jump into the real estate business, “business”, to create a business. But they end up creating a job because then, I mean [overlap talk]

Rod Khleif: Certainly. Certainly. Certainly, if they’re buying and selling…

Abhi Golhar: Yes.

Rod Khleif: If they’re in residential flipping or wholesaling or any of that stuff. If they’re investing in multi-family, then I believe they are building a business.

[00:30:01]

Rod Khleif: If as long as they continue, and hopefully exceed their monthly obligations. No, that’s good. And you’re right as far as awareness. You need to evaluate your risk muscle. You need to evaluate whether or not you really are going to be comfortable taking action and that you’re okay with developing that business versus being passive. No, that’s sound advice.

Abhi Golhar: Yeah.

Rod Khleif: Alright. Fair enough. Last question. What book do you gift to other people the most?

Abhi Golhar: I would say, if you’re just starting out, Rich Dad, Poor Dad is a great one.

Rod Khleif: Yeah. That’s for sure, of course.

Abhi Golhar: I would also say Power Versus Force.

Rod Khleif: Oh, that’s a great book. Great book. I haven’t heard that title in forever. That’s a great book, yeah.

Abhi Golhar: Yeah.

Rod Khleif: That’s a very illuminating. You know who pointed that book to me?

Abhi Golhar: Oh, man it’s…

Rod Khleif: It was Wayne Dyer.

Abhi Golhar: Okay.

Rod Khleif: I saw Wayne Dyer speak… Unfortunately, he’s no longer with us.

Abhi Golhar: Yep.

Rod Khleif: If you guys haven’t ever read any Wayne Dyer’s book, just go read them all.

Abhi Golhar: Incredible.

Rod Khleif: He’s fantastic.

Abhi Golhar: Incredible.

Rod Khleif: But yeah, he pointed that book out to us once when I saw him speak here in Sarasota…

Abhi Golhar: Yeah.

Rod Khleif: Well listen, brother, thank you for being on the show.

Abhi Golhar: You got it, man.

Rod Khleif: How do people get in contact with you?

Abhi Golhar: Well I’d say, go to realestatedealtalk.com.

Rod Khleif: Perfect.

Abhi Golhar: That’s really where I live. I’m everywhere on social, and just a shout out to you man, to keep doing what you’re doing. It’s because of people like you that make my job significantly easier, and you are… I feel like I’m standing on your shoulder. I mean, you guys are giants in this industry, and for me to be… For you to say, “Hey, man, come on my show and help out.”

Rod Khleif: Thank you for that, brother. Thank you.

Abhi Golhar: I’m more than happy to.

Rod Khleif: Thank you. You’ve absolutely added value today. And we’re really grateful that you’re on the show, my friend.

Abhi Golhar: You got it. Thank you very much.

Rod Khleif: Alright. Take care.

Abhi Golhar: Yeah.

Rod Khleif: See you.

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Thank you for listening to the Lifetime Cash Flow Through Real Estate Investing Podcast. If you’ve enjoyed the show, please subscribe, and then take a moment to visit iTunes and leave a five star rating and review. For more resources to connect with us further, please visit our website at lifetimecashflowpodcast.com. Tune in next week for our next show.

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