Ep #593 – From refugee camp to $100 Million in assets
Eng Taing is an economist by training, from the Wharton School of Business. He also has experience leading data science and analytics at Apple, Capital One and AT&T. He applies that experience when identifying and underwriting investment opportunities and markets. What’s so inspiring is that Eng was born in a refugee camp in Thailand.
Here’s some of the topics we covered:
- Assisted living facilities
- Independent living through Skilled nursing care
- Staffing considerations
- Opportunity zones
- Communication skills
- Telling the Why, When and How
- Relatable and simple
- The value of resilience
- How to start out in real estate
For more information on our guest, please visit:
Full Transcript Below:
Intro : Hi my name is Rod Khleif and I’m the host of “The Lifetime Cash Flow through Real Estate Investing Podcast”. And every week I interview Multifamily Rock Stars. We talk about how they built incredible wealth for themselves and their families through multifamily properties. So hit the like and subscribe button to get notified every Monday when a new episode comes out. Let’s get to it.
Rod: Welcome to another edition of how to build “The Lifetime Cash Flow through Real Estate Investing”. I’m Rod Khleif, and I’m thrilled you’re here. And I know you’re going to get incredible information from the gentleman we’re interviewing today. His name is Eng Taing, and Eng has got about $100,000,000 in assets under management. But he’s in other asset classes than what we’re normally talking about. And so I’m really excited, which is senior housing, which I’m really excited to dig into with him. And I think he’s got an interesting story. So welcome to the show, my friend.
Eng: Thanks for having me, Rod. I really appreciate it.
Rod: Absolutely. So could you give us a little bit of a background? Because I know you worked at Apple and you’ve got quite a bit of background here. You’re an economist. So if you could just talk about that, and how you ended up getting into real estate.
Eng: Yeah. So I’m probably a classic immigrant story, maybe a little bit more different than others. But I was born a refugee camp in Thailand. My parents are Cambodian, escaped to Khmer Rouge, came here when I was three years old. I had some really crazy stories of, you know–
Rod: I remember reading about the Khmer Rouge and the atrocities and the genocide and all of that. I knew you were– I assumed you were Vietnamese from the name, but I–Cambodian. Forgive me if that’s an insult. What I just said, I don’t know the culture well enough to know, but anyway, wow the Khmer Rouge, I mean, was trying to think of that movie that–
Eng: “The Killing Fields”.
Rod: Yes. Okay, anyway, I’m sorry I interrupted you. Please continue. Forgive me.
Eng: No.That’s okay. I love having conversation about this. It’s really my parents story. But in for–it really formed me for who I am. And you know, growing up in L.A., in California, I grew up on welfare, poor. My parents didn’t have any education. My mom told me of her stories of carrying buckets of water, miles in her teenage village but they were hustlers and they kept hustling and working long hours. And so it really instilled me my entrepreneurial spirit that for me, my overall driving why was lifting my parents, my family out of poverty. Had three siblings. I was really good at math. I was really good at data patterns and eventually got into day trading when I was 16. And this is before anybody had apps or smart phones. Had to literally go in between classes to go to school library and log into my brokerage account and do some trades. Early 2000s. So almost everyone is winning until they didn’t. But then I went to Wharton, which Ivanka was a senior when I was a freshman.
Rod: Wow. Cool.
Eng: Yeah. I got into poker. So more data analysis and stats. Was a two-time champion at Wharton. And then got into more you know, stock trading and day trading and got into investment banking after that. And I really didn’t like that volatility. It was just so much actually– because if you come from a poor background like me or with little means, every time you lose something is like that took forever to earn.
Eng: You know, working four or five jobs, everything you– but if you’re not willing to bet on that, which is what it is. You know, stock investing is betting. Playing poker is betting. Sure. You might have better informed pot odds or better informed data, but still there’s some element of risk, with any investing. But it felt very risky and I didn’t like that feeling. Once the stock market crashed, it made sense to go into real estate. Like oh, these prices are really good.There’s some really great cash flow on this. I could buy this for 126. Put 30% down at that time and was cash flowing thousand dollars a month. On a $35,000 cost basis. It was great.
Rod: Nice. And so you started in single family, I take it. It was that in L.A. or where did you start?
Eng: I started in L.A. I was–I bought my first property when I was in DC. So I started to get out of state investing and I’ve been doing ever since. It was a triplex and I have bought a few single families, but typically I’ve always bought triplex crop plaques to start what essentially my w-2 could help accelerate because you know, when you’re getting a residential loan four units above, below. They care about what income you’re making and they don’t really care what property income is.
Rod: Right. Yeah, they qualify you. So you mean four units or above. Is that what– did I misunderstand you.
Eng: Four units and below.
Rod: That’s well below.Correct. It’s about you. When you get higher than that, it’s the properties of ability to service that, that’s the biggest factor. Gotcha. Okay, and now you do syndications, you do larger– chart larger transactions. So your asset base is– I know you’ve got, what would you say, seven senior housing facilities?
Eng: It’s six and then one under contract.
Rod: Oh, fantastic. And is that– where that– those assets are based or do you also still have some other multifamily that’s lumped in there? I didn’t get that–
Eng: I have 800 units, in multifamily. I love multifamily. It makes a lot of sense. It’s a very salable asset. It’s also very buyable which means that the cap rates have compressed. It’s getting a little bit too hot or–
Eng: I’ve been thinking for the last three years that there’s still good deals out there. It’s just hard to find.
Rod: So I’m gonna–, guys those who are you listening, forgive me. I am going to spend some time on senior housing just because it’s kind of a pet thing of mine. I’ve been threatening to do it for a decade. And back 10 years ago, I used to own the domain name “affordableseniorhousing.com” and I never did anything with it. And I really planned to do it. So I’m going to spend a little time here.So forgive me if that doesn’t interest you. But– so your facilities are they residential assisted living or are they larger? Give me an idea of what it is that you have.
Eng: They’re almost always– they’re all sort of around 100 units around 80, 200 unit facilities, and they’re typically newer facilities with a lot of amenities. Think of it like a all-inclusive resort
Eg: Of course a year, and it’s targeting 85 plus typically Assisted Living Memory Care, potentially some skilled nursing in some facilities. But it’s the facilities that are you know, for the seniors the average about 10 years, around 28 months and their income resistant because they don’t have income. They’re using the retirement or using the last savings to have a really good end of life care and end life facility to live off. We do have independent living as well. That’s typically a graduation. You have independent living, you graduate to assist it, you graduate to memory care, graduate to skilled nursing and then yeah.
Rod: Right. And yes. And so are you an operator or you just own the real estate?
Eng: I am an operator, but I am an operator with really great people, executive directors and folks that really do most operations.
Rod: Okay, and that is a– that’s a lot. I mean, that’s a business. And then some right? So many components to it. The medication, the food, the safety, the– right?
Eng: Yeah. It’s almost all, when you think about multifamily, it’s business as well, but it’s a very light touch business if you set the process up right. With seeing you living. It’s very much about H.R. so many staff you have to manage and you have to make sure you efficiently do so. But the great thing is high operating business with all the tax benefits of real estate. Great combination.
Rod: Yeah, no, I mean, I’ve always been interested in it and you know, there’s of course a lot of liability. You do not want to, but you don’t want to make the cover of the paper for having an employee, you know, not do the right things with grandma obviously, because, you know, there’s a lot of litigation, a lot of regulation and rightfully so. It should be. And you hear some of these horror stories. But and–you know, I hear that, you know, sometimes you’re not able to pay– the pay scale may not be really where it’s an ideal pay scale. So sometimes you’re dealing with people that, you know, that are– I don’t know how to word this properly without pissing a bunch of people off. But I mean, it’s really, you know, you can’t pay to hire the best possible people, so you have to do a lot of training. I’m assuming you’re continually training, you’re validating, you’re affirming these people and helping them grow and become more. So, did I articulate that properly?
Eng: Yes. It’s– you gotta give people a chance, but you got to move on from people as soon as you do it on–
Eng: They don’t meet the standards are what the seniors expect and our residents expect. They want to be in a very comfortable position and they’re paying typically four to five times the average rent of what a multifamily in that area would serve,go for. And your expenses are four to five times more, which is where you get better yield and better profit margins. But you have to optimize for that. And I’ve seen other facilities and other people in this industry go bad because they have the costs creep up, their staff costs, their other costs. Those are costs that in multifamily aren’t just there and here. If you’re a good business operator, you can control that.
Rod: And so you’ve just got great partners in this business, is what you’re saying that help you operationally? Because I’m surprised you would even have time to talk to me with that many facilities if you–you know, if it was all you. So are you building them or buying them?
Rod: Both? Fantastic. Fantastic. What markets are you in, if I may ask?
Eng: A lot of our multifamily and one of our senior living is in Kansas City.
Eng: And then I love Kansas. Great barbecue.
Rod: And then you talk– are you talking about the eastern half of the state or the western half.
Eng: Eastern half–
Rod: Like Nashville or Memphis.
Rod: Nashville or Memphis, which side?
Eng: I think you come at Kansas City.
Rod: Did you– Oh, I thought you said Tennessee.
Eng: Tennessee, I said Kansas sorry.
Rod: Oh, Kansas City, forgive me, I misunderstood you. Oh my god. I had a bad experience in Memphis, and so I was just gonna–I thought you said Tennessee. Forgive me. Kansas City.
Rod: All right. A little snafu there. All right. So they’re in Kansas City. Okay, nice. Okay.
Rod: It’s a great market. That’s a great big market.
Eng: Great market. And then also, we have a bunch of facilities in Florida, of course, with developing facilities, opportunity zones.So–
Rod: Okay, well, let’s talk about–let’s shift gears then. Let’s talk about opportunity zones, because I’m kind of a neophyte as it relates to opportunity zones. I just haven’t had the bandwidth to really study. Talk about what the advantages of our– of you take– you know, utilizing an opportunity zone for this.
Eng: Yeah and I talked a lot about opportunity zones because my background is in tech and lot of our investors are tech investors. And as you can imagine, they get a lot of stocks, to get a lot– they have a lot of Apple stocks, a lot of Google stocks and those are have appreciated a lot. And normally when you sell stocks, the only thing that you can do with it is to pay tax, maybe have a DST. But, you know, with real estate, you can defer, defer, deferred, tender exchange.
Eng: Opportunity zones, same concept. Take that profit interest, capital gains. So say so, $200,000 of Apple stock, your cost basis 100.Take the $100,000, invest in Opportunity zones fund. That starts a ten year clock. And if you invest before end of this year, you also get a 10% reduction. So when you pay in 2026, instead of paying that say 20% long term capital gains on your $100,000 you now pay 18,000 to 10% less. You can invest a whole 100k compound and grow it, and you get the cost basis. You get depreciation, you get all the same thing as real estate, right? That’s just a wrapper. Through OS app wrapper. Then after ten years you can get all future capital gains eliminated. So you don’t have to do any kind of exchange depreciation recapture, which is classified as long-term capital gains also gets eliminated. So potentially all the cash flow that you earn during that ten year hold, which should be significant if it’s in your living will also be eliminated, usually it’s deferred. But here’s completely eliminated.
Rod: Wow. In the opportunity zone. Interesting. Okay, and is that where you’re– I assume that’s where you’re building then not actually buying your building houses.
Rod: Okay. Wow. Okay, so wow. That’s fascinating. And, and so there’s no– you know, like in real estate, you know, there’s that component that relates to being an active investor versus a passive investor as far as from the tax side. So that doesn’t come into play with stock like that.
Rod: Okay, interesting. Okay, well so I know you worked at Apple for a while. First of all, what did you do there? Because that’s just such a cool company. I mean, what an incredible brand following they’ve created. It’s just such an impressive success story. What did you do there? And then how did that experience help you in what you’re doing now?
Eng: Yeah, my last job there was a senior– a data scientist at Siri, so I analyzed billions of records. If you said anything, Siri I probably–I didn’t look at it directly, but I analyze it and I help make Siri smarter. If it’s not as smart as it is, I’m sorry. It’s not my fault.
Rod: It’s pretty freaking smart. I mean, she messes up once in a while, but I’m pretty–
Eng: Yeah. It’s interesting because you gotta understand every dialect and everything. Its typically talking. It’s very interesting but it’s all the data patterns. And what I did was a lot was also pitching stories to our executives around new features we’re trying to develop because I take the data, I say, “hey, I see a lot of usage in this space”. Can we create a function that allows you to use your iPhone to control your Apple TV and use it as an all inclusive theater.
Eng: People are asking that it doesn’t do anything now because it doesn’t but we have the data to show that.
Rod: Okay, so you would make presentations to the big shots there, is that correct? Like Tim–
Eng: Yeah. I’ve been with few other folks.
Rod: Wow, very cool. So how did that presentation experience help you in your communication with investors for the things that you do now?
Eng: I think it was one of the most important things I’ve learned and one of the things I never thought would be that useful outside corporate America, making decks all day. If you’re in corporate America, you probably do that a lot. But the point is like– it’s about telling a story of a why, when and how? Why are we doing this? Why should you do this? Why should you invest in this? How are we doing this? How much features should we built? How are we creating the value and how so–Why should you trust us? How to trust us. And so I find it one of the most fascinating things in my transition from Apple to Touzi Capital to really think about creating very informative but also simple means of expression. So what Apple does really well is focus on simplicity and delighting and surprising the customer. We always talked about that when I was working at Apple Music or Siri is like, how can you make things simple? It should be just obvious and intuitive. And so when I think about our investments with Touzi Capital, I always think about how can I make it simple? How can I make it be relatable to a person who potentially hasn’t done this before? Or you know, have experience with a 401K or a single family house. How can you make it relatable and simple? I shouldn’t have to go through a 50 page pitch deck to talk about all the highlights of this, of the–
Eng: Investment. It should make sense in the first five pages.
Rod: No, that’s really smart. So, yeah, I mean, when you’re presenting to us, you know, one of the biggest companies in the world, CEO, you better get to the point very quickly. Right? And that’s yeah. That’s great framework. And I love it. And so, you know, let me ask you a question that I know where you’re going to go with this, but I want to ask the questions to my listeners here. What do you think is one of the key reasons that people are successful?
Eng: I think people who are adaptable and flexible to change are, at least from my experience, really stressful. I have had many jobs. I had many careers. I have been in many asset classes. I have experienced many financial economic situations and the ability to be adaptable and flexible and I’m not saying you should change your mind all the time. I’m saying you should be able to roll with the punches, be resilient, change when things don’t make sense, give it a shot, be persistent, but also know when you should change course.
Rod: Give me a one of the most profound examples in your life when you had to be adaptable and or innovate or pivot. You know, I’m thinking of mine you know, where we were supposed to have 800 people at a live event last May. And we all know what happened with that. So I had to go online and pivot and innovate and be– and adapt. Very quickly. Give me an example from your background, the largest one you can think of, where you had to pivot and adapt.
Eng: That my real estate or like–
Rod: Oh, yes, real estate would be preferred. Yes.
Eng: The biggest change has been realizing that all my California assets don’t make sense and having to pivot. It could have just been easy because I was living close by. I could just kept buying. I had all the connections. It was making decent cash and cash relative to my peers buying California. I was doing better than them, but I could have just kept doing that and been satisfied with the growth and appreciation that California does give. But then I would have been frustrated with the rent control laws and the eviction laws and other stuff that makes it hard to be a landlord. So I made the effort to go to Kansas City to make connections there, to find partners and experts in other markets and partner with them and pivot from being this person who just by this every other year, every year to growing bigger and thinking bigger and relying on more people and part of them more people and getting outside my comfort zone.
Rod: Nice. Did you have any mentors as you were growing, you know, like in the senior housing space, for example? How did that come about? Did you meet someone that does it or just give us a little background on that?
Eng: Yeah, I had a few mentors, Doug, for example. He used to be a CEO of a really large senior living facility. I have partners who used to be CEOs of these other REITs and facilities. These guys have a lot of experience in this industry. And what I really like is that everybody had experience wants to be helpful, and when they’ve accomplished a lot, they want to give back. I find myself always wanting to potentially mentor people.If I ask myself and I don’t have as much experience as these guys, I have a lot of good success and fortune. But I really do enjoy that. And I really appreciate when folks in this industry are very generous in giving me with the time.
Rod: Well, I will tell you, you know, it’s interesting when I interview people for my Warrior Mentorship Program and I asked them what their why is, and I hear that they want to do something outside of themselves. They want to help in some way, make the world better, help, you know, in any– and any time I hear something outside of themselves. I know success is inevitable because that’s just the way the world works. And that’s why those people you describing are successful to begin with, because they have that mindset and recognize that we’re all on this earth to contribute and help each other. So let me ask you this Eng, what would you say to my listeners that are aspiring commercial real estate investors? They want to get into multifamily. They haven’t taken the plunge yet. They haven’t taken action. What words of wisdom would you give them, my friend?
Eng: I would say just do it and is such a weird thing to say. What do you mean just do it? Just do it? I would say if you want to get into real estate, even if you don’t have the means to do it. Just go attempt it, find a market, find a couple of buildings and make an offer. Do that, maybe not at least you’ve made some reps. You’ve learned a little bit more. Create a pitch deck, create a pitch deck for everything. Create an Excel pro forma and underwrite it and pitch it to yourself. It is a good investment. If you can’t convince yourself it’s good investment with numbers and math and you relying on the fact that there’s a Starbucks and there’s a Chipotle and the skews of five nine or something like what does it matter. If it doesn’t mean that this is going to be a very nice yielding asset and it’s all about returns really at the end of the day, those factors drive that then if you can’t convince yourself, can’t convince investors, you can’t convince the bank is the biggest investor and other folks involved.
Rod: Oh, good. Good advice. So on the thing of advice, what’s the best advice you think you’ve ever gotten about real estate?
Eng: I think the best advice has been to partner with people. I think if you can’t think– if you think that this is the only deal you ever do. This is the only thing you have to do. And this isn’t the first of many, then you might be less generous. You might be less open to partnerships. You might be wanting to do it all. Like, I don’t want to hire a property manager because I want to keep that earnings, because my time is you know, I want to just drill my time into it. If you think of it like this is the first iPhone I’m building and it’s expensive, the prototype but the millions of iPhones could be cheaper. And I’m going to do this for a million times, then you’re going to think, how can I scale, how can I grow with people and partisan experts.
Rod: Yeah. Partners is how you do it. And this guy, this business is a team sport. On that note, since he brought up partners, I’ve got a book that has all the important questions you should ask before you get in a partnership. So if you guys want it, it’s free because partnerships like a marriage are easy to get into, but they’re hard to get out of. And if you want that book, just text the word “PARTNERSHIP” to “72345”, and I’ll send it to you because, you know, I’ve had some you know, in my multifamily boardroom mastermind I’ve had some large operators, thousands of doors split up partnerships because, you know, they didn’t ask those hard questions up front. So let me ask you this Eng, what inspires you? What’s your why? I think I know the answer because I can see the wall behind you there. But I’m just curious what your answer is.
Eng: I just had another son. He’s three years old and now he’s three months old. I have another son who’s three or almost three. And that’s definitely why it’s always been family. And when I haven’t had that as my why, I’ve been kind of aimless. My first, was my family was, we were poor and I was the fortunate one to go to a good Ivy League school and really smart and all that time was pushing to help them overcome. But as soon as they became okay on themselves, I kind of lost my why a little bit. And then when I met my wife when I was in the Peace Corps–
Rod: Oh no kidding. How cool. Wow. You both have big hearts. I love it. What a what an awesome place to meet the love of your life. I love it. Well, guys, you can’t– if you’re not– if you were listening on iTunes, these babies are behind them on the wall. Maybe that’s just one of them. I don’t know. But just absolutely beautiful, your beautiful family my friend. You are blessed. Yeah. And so the name of your company is Touzi Capital, TOUZI is that “touzicapital.com” or what’s the web–that’s “touzicapital.com”. And so, yeah, obviously incredibly intelligent guy forgot more about a spreadsheet than I’ll ever know in my lifetime or economics. I know you’re an economic by training at Wharton, which is great. By the way, I want to ask you so you a two time poker champion there?
Eng: Mm hmm.
Rod: No kidding. So is there a numbers component to it or is it just your ability to have a poker face or just speak to that for a moment before we cut loose?
Eng: It’s almost all number space. But then when you’re in live tournaments, you also have to have a very good read of people. And I think those two things are– I studied Behavioral Finance. Behavioral Finance is the study of incentives and motivations of people and how it can change people’s perception of things and bluffing and betting and doing all that stuff. It’s about changing people’s perceptions, whether you representing a card, a hold card or whatever it is, it’s really cool that you can combine both things.
Rod: Oh, that is cool. Yeah, that’s awesome. Well, listen, my friend is very much a pleasure to meet you and I appreciate you sharing your wisdom and humoring me on the senior housing component of what you do. But even though this is multifamily podcast. But thank you. And it was my pleasure to meet you as well. Appreciate your time.
Eng: Thanks for having me, Rod. I appreciate it.
Outro: Rod, I know a lot of our listeners are wanting to take their multifamily investing business to the next level. Now I know you’ve been hard at work helping our warrior students do just that using ACT methodology which is Awareness, Close and Transform. Can you explain to the listeners how they can get our help?
Rod: You bet. Guys, we’ve been going non-stop for three years building an amazing community of like-minded people. And our coaching students which we call our warriors have had extraordinary results. They’ve purchased thousands and thousands of units and last year we did over a thousand units with our students. And we’re looking to grow this group and take it to the next level. We’re looking for people who want to follow a proven framework that’s really step by step and then leverage our systems and network to raise equity. To find and close deals and to build partnerships nationwide. Now our warrior community is finding success in any market cycle. So if you’re interested in finding out more about how you can become more of our incredible network and take advantage of the incredible opportunities that are coming very soon. Apply to work with us at “MentorwithRod.com” or text “CRUSH” to “72345” and we’ll set up a call so you can check us out and we can check you out. That’s “MentorWithRod.com” or text “CRUSH” to “72345”.