Embracing Discomfort For Greater Success In Multifamily

Full Transcript Below

Intro
Hi, my name is Rod Khleif, and I’m the host of “The Lifetime Cashflow Through Real Estate Investing” podcast. And every week, I interview Multifamily Rock Stars and we talk about how they build incredible wealth for themselves and their families through multifamily properties. So hit the “Like” and “Subscribe” buttons and get notified every Monday when a new episode comes out. Let’s get to it.

Rod
Welcome back to Multifamily Rock Stars. So as you guys know, this is where we interview people that are crushing it in this business, and we show you the inside scoop and the inner workings of how multifamily investors are creating incredible massive success in their businesses and also in their lives. And as always, I’ve got my co-host, who’s also the director of our Massive Action Team for my Warrior group, Mark Nagy. What’s going on, Mark?

Mark
Hey, Rod, happy to be here. Good to see another familiar face for our guests here.

Rod
Yeah. So this is a real treat because we’ve got a real ray of light on today. Her name is Vessi Kapoulian. And Vessi– let’s see, she’s been in the Warrior program, let’s say, since the end of September of 2021. And she’s in a total of 161 deals that she controls. She’s a marathon runner, which I didn’t know. But anyway, I’m very excited to have you here, Vessi. Great to see you again.

Vessi
It’s so great to be here, Rod, and thanks for having me. And great to see you again, Mark.

Mark
Yeah. Absolutely.

Rod
Yes. So why don’t you take a minute you’ve got a very interesting background, which I didn’t really touch on at all. Just give us a high-level overview of where you come from because you’ve got some background that actually lends itself to this business, which is, you know, a real plus. Just give us a little kind of bio as it were.

Vessi
Absolutely. Happy to share that and I will keep it related to real estate. And with that, the real estate seed, you could say, was planted in me a while back behind the iron curtain in Bulgaria because, at the time, there wasn’t really a developed stock market in Bulgaria. So when people talked about investments, they really thought of hard assets, usually real estate, maybe some precious metals, and that’s it. But like most people, I took the traditional path of going to school. It was my dream to come to the US. And so I came here with my two little suitcases, a lot of hope, faith, and determination, and kind of took the traditional path of going to school and grad school and eventually joining a firm and starting to climb that corporate ladder.

Rod
By the way, how old were you when you emigrated? Forgive me, how old were you?

Vessi
I was 19, 18, 19. Yes.

Rod
Wow. That’s brave. That’s brave. All right, please continue. Wow. Okay.

Vessi
Absolutely, yes. So I started climbing that corporate ladder and one would say clues were all around me. It just took me a little bit longer to see those clues. One being the Enron scandal, the stock market crash, and eventually, my own company going through a restructure. And you see how a lot of people either lost their 401(k) retirement, in some cases, jobs. And that really prompted me to start thinking, well, what do I do about that?

Rod
To protect yourself, right? To protect yourself.

Vessi
To protect myself, exactly.

Rod
You know I just saw– sorry to interrupt again. You know I’m so bad at this. I apologize.

Vessi
It’s okay. No.

Rod
But I just saw Disney announce they’re laying off 8,000 people.

Vessi
Yes.

Rod
I mean, this was just yesterday.

Vessi
Right.

Rod
Of course, we’ve seen all the tech layoffs, so who knows what’s coming down the road? But anyway, I’m sorry. Please continue.

Vessi
No, this is a great point because a lot of people don’t think about that.

Rod
Right.

Vessi
So I finally picked up those clues, although it took me a while, and in 2017 made my first investment out of state. Really as a way to diversify away from the stock market, build a retirement, nest egg, and that’s what it was going to be initially. But it worked well. It was cash flowing and it prompted me to ask the question, why don’t I repeat this? And this led me to buy another property and then another. And then the question came, well, how do I scale this further?

Rod
Put your mic back up by your mouth, honey. Yeah, you went faint for a minute there. There you go. There you go.

Vessi
Can you hear me?

Rod
Yes, much better. Much better. So back to your answer. You said, how can you scale this? Please take it from there again.

Vessi
Yes. How can I scale this? And at that time, I had started joining various investment forums and one particular person told me, why don’t you think about multifamily? I don’t know why I didn’t think about it sooner because a lot of my skill set and experience would lend itself very nicely, partly because my W-2 job is a commercial lender, so the underwriting and analysis is something I could easily transfer. And then from my residential experience, investing remotely out of state, managing the manager, all of these are transferable skills. So I decided to take action and delve straight in. I was very fortunate because at the time, so all of that was happening during Covid, and you had a virtual boot camp in July of 2021. So I joined that. It was packed with a ton of knowledge. You literally give away everything, everything you teach in the program. And I distinctly remember there was a call to action, and I figured, I’m here. Let’s take action. Let’s schedule that call and find out more. And that one conversation led to another. Before I knew it, I had joined the Warrior program, which was one of the best decisions I’ve made because, at that point, there are a few things. One, you have a more structured approach through the courses that you– that helps you learn. Two, you have accountability. If you opt for the coaching option, which is what I wanted to do, and that propels you faster further. But most importantly, you surround yourself with a network of like-minded individuals and mindset, your environment, that’s key to success. So a combination of all of that successfully helped me make that transition into multifamily or I should say expansion into multifamily.

Rod
That’s awesome. And I know you’ve partnered with other Warriors on these deals that you’ve done, the two deals that we mentioned already. And, you know, you said something about being around like-minded people. You know guys, those of you listening, there are people in your life that out of their fear or their limiting beliefs or their fear of losing you or their fear of feeling rejected if you succeed or feeling less than if you succeed, they will hold you back or out of their love for you because, again, they might feel like they’re going to lose you. And sometimes it’s family. And so I’m going to tell you, love your family, but proactively choose your peers, you know. Obviously, we’ve got an incredible environment in the Warrior program, but if you’re not interested in that, go to a real estate investor club meeting, go to meet up groups, and meet like-minded people that are going to be excited about your success or your desires, your dreams, not afraid of them. Super, super important for you.

Mark
And one thing I want to talk about, once you did that, you had an interesting story doing your two deals, right? A lot of people always ask me, well, what’s realistic? How quickly can you get deals done? And I know you did your first deal about six months in, and then I think you said your second deal a week right after that.

Vessi
Right.

Mark
How are you able to do that? What did you put into place? Tell us about the story about getting those two deals and doing that in a fairly short amount of time.

Rod
Yeah.

Vessi
Absolutely. So big picture level is getting comfortable with being uncomfortable. So that’s number one. And taking action despite of that discomfort that you may feel along the way. From a more practical standpoint, I think it’s very important to be focused. So in those early conversations with my mentor, and even Rod would very often say focus, right? That’s the power of focus. I focused on the market, that’s number one. And I focused on a way I could add value. And in multifamily, there are really three ways you could do that. Attracting capital, acquiring the asset, or asset management. I call it the three As. Given my background in lending, loving numbers, and being more analytical, I naturally gravitated towards the underwriting, so the acquisition piece of it. And in terms of market, because I already had some presence in Florida through my single-family portfolio, already knew at least one of the markets, Orlando, since then I started looking at other markets within Florida. I decided to just start it there. So I set on a journey following literally the advice that Rod gives in his program, all the steps of reaching out to brokers, responding, even though oftentimes it’s a no and really analyzing a ton of deals. It took me nearly 200 deals before I found the one.

Rod
Wow.

Vessi
And of those 200, probably five, we submitted LOIs on. And of those five, one worked.

Rod
We got one deal. Yeah, that’s very common. Two or 300 deals to get one. I want to circle back to a couple of things you said, Vessi, which are just so awesome. Number one, as you said, get comfortable with being uncomfortable. Guys, those of you listening, Tony Robbins has a famous quote, which is “the quality of your life is in direct proportion to the amount of discomfort you can take”. Okay? And I will tell you if you sit and think about anything amazing that you’ve ever done in your life, I promise you, you got out of comfort. You pushed yourself. Okay? And it’s the same way with this business. And, you know, the comfort zone is a nice warm place and nothing freaking grows there, right? Like Vessi knows, one of the first things we do at our boot camps is goals. How do you get anything if you don’t know what it is? You know, people spend more time planning a freaking birthday party than they do designing their lives. And doing your goals is designing your life. So by the way, I did it on– if you can’t come to my boot camp, I’ve got virtual boot camps every, you know, few months. I’ve got one coming up in, I think, is it March 11th and 12th? That sounds– no, or is it May?

Vessi
May.

Rod
May 11th and 12th. I got too many events. May 11th and 12th. And that’s virtual. I don’t sell anything there. And it’s just, you know, training and it’s drinking through a fire hose. But the first thing we do is goal-setting because you’ve got to have that– you’ve got to create that burning desire so you push through those limiting beliefs, so you push through the fear, so you get uncomfortable. So you’re okay with comfortable, you know being comfortable to get uncomfortable. And you got to really want something to do that. It’s so freaking important. Now, if you can’t come to the boot camp if you go to “RodsLinks.com”, “RodsLinks.com”, at the bottom is my goal-setting workshop. I did it on January 2nd of this year. Have your kids do it. Have your spouse do it. Because, again, it’s absolutely so important. Then the other thing you said was focus. And focus is so important. The people that are the most successful in the world are the ones that have the highest degree of focus. Focus gives you clarity. And right now, I like to say this as well. If you’re listening to me, you are– or watching this, you’re a leader. And right now, the world needs leaders more than ever. And as a leader, you have to maintain your focus. So don’t get me started on all the crap that’s on the news right now. You need to block that stuff out. You need to stand guard at the door to your mind and bring in the good stuff and focus on the good stuff and like your goals to push through because we’re heading into some economic turbulence. We’re already there. And so, you know, your focus– and the news is going to say and think, the sky is falling. And they’ll say real estate will be bad forever, which is what they said in 2008 and ’09. But like anything, real estate goes through seasons and goes through cycles. And when it goes down, it always comes back up and always stronger, actually. But your focus is going to be even more critical through this period. Anyway, I kind of went on a little tirade there, but, you know, I think it was important to drill down on some of that stuff.

Mark
I’d like to get your opinion on that, Vessi, now that we’re talking about the market right now. Today is February 9th, I don’t know when this episode will get released, but what is the biggest thing that you’re currently struggling with in the market right now as it is today and–

Rod
If anything.

Mark
Yeah. And do you think that’s going to change?

Vessi
Yes. So like Rod said, right, there are ups and down cycles that we go through, so nothing to be scared of. I would delve this year as expect the unexpected. There are a lot of things happening. And of course, with the recent release on inflation numbers, I don’t know how many people paid attention to the fact that they were slightly modified, which was all on the Bureau of Labor and Statistics site. But anyway, at the end of the day, I believe in real estate in the long run. And so as I am still continuing to look for deals to buy, I am adjusting my underwriting criteria to be more conservative and in line with the market. But it’s not preventing me from continuing to look at deals. People ask me, when is the right time to buy? How do I time the market? I don’t like to time the market. Anytime is a good buy as long as the numbers make sense.

Rod
That’s it.

Vessi
So I want to fall in love with the numbers. Don’t fall in love with the deal and just keep striving forward. So right now, the biggest challenge is finding deals that pencil in.

Rod
Still pencil out because it’s still, right now, it’s the people that want to sell. It’s not the people that need to sell.

Vessi
Right.

Rod
The people that need to sell is coming. Okay? And they’re going to be incredible opportunities. And we’re seeing it already. And, you know, deals that these people that got bridged debt on are in trouble, and they’re going to have to likely sell at a discount. And so, you know, that’s an important piece of this. You said something else that I really loved and I lost it. Anyway, okay. So, Vessi, you know, we have so many people that listen to this show that have not taken action yet. Maybe they’ve done a house or two, you know, maybe a duplex or something, but they know they want to go bigger. They know they want to, you know, really create that lifetime cash flow, create that life of their dreams, that legacy. And, you know, out of fear or limiting beliefs or comfort, they haven’t done it yet. What would you say to that person?

Vessi
I would say– first and foremost, surround yourself with like-minded individuals or people who encourage you, people who are one, two, or three steps ahead of you. So to help you envision what is possible. Have clarity of goals. That’s very important, not only of what you want but why you want it because your why will push you to take that first step. It will propel you further during good times and it will pull you up during tough times because this is not an easy business. There are tough times and you have to show up. Every day, 100% you have to show up and take action. But when you think of a big apartment building, 100 or 200 units, that may seem overwhelming, and that’s okay. Think of your first step. What is my first step that I need to take to get there? Maybe it’s joining a Mastermind like Rods. Maybe it’s reading a book. Take that first step and then think of what is step two, what is step three. And be consistent. It doesn’t have to be a big step, but take that first step and before you know it, if you are consistent every single day, when you look back a year from now, you will be much further along than where you started. So that would be my advice.

Rod
Love it. Love it. Yes, those tiny steps add up as long as you have forward momentum and you’re consistent. And you said get around people that are a few steps ahead of you because a rising tide lifts all ships. You know, if you’re going to play somebody in tennis, do you want to play somebody better than you or worse than you? Right? You know the answer. And so it’s the same with this business. You just got to get in proximity. Proximity is power. Get around people that are doing this. By the way, as it relates to proximity and it relates to getting around people, if you’re interested in our Warrior program, you heard what Vessi said. And as you guys know, that’s pretty much all we interview on this Rockstar portion of my podcast is Warriors, which is astounding that literally, you know, we’ve got hundreds of them that can come on this show and speak about it. But if you’re interested in applying to the Warrior program, text the word “crush” to “72345” so we can help you crush it in this business like Vessi. So again, text “crush” to “72345” to apply and we check you out and you check us out. And if it makes sense, then fantastic. If it doesn’t, you’ll still leave that call better than when you got on it, I promise you that. But the other thing that you said was to take action. And guys, I’m talking massive freaking action. I will tell you, action mitigates fear. My most successful students aren’t the smartest. They’re not the wealthiest. They’re not the most connected. They’re the ones that take massive freaking action. Okay? And that’s one of the biggest secrets to success in this business. You just have to do it. You know, yeah, are you going to make mistakes? Are you going to get your nose-blooded? Are you going to have setbacks? Sure. In fact, that’ll be my next question for Vessi, but I don’t want to take all the thing. Mark, ask your next question and then I’ll come back to that.

Mark
Yes, I get this another question that I get all the time, differences in deal sizes, JV, syndication, what’s the right way to go? Is there right or wrong? And you’ve done an 11-unit JV and you’ve also done 145 units of syndication, so you’ve done both. What are some of the differences between the two, whether it’s your team, deal structure, asset management, or maybe it’s all the same and it’s just mental that holds people back? You know, tell us, what do you think the differences are?

Rod
Good question.

Vessi
This is a great question. I personally chose to pursue both. You don’t have to pick one or the other. You can also do both because I view the JVs as my forever buy-and-hold strategy. With syndications, those are usually larger deals, more complex. And you do more often than not, right, work with passive investors. And very often they like to get their returns within three to seven years. So you continuously turn those deals every three to seven years. So there are pluses and minuses of both. I like both business models based on my own personal investment goals and criteria. With JVs, you have less people usually, I would say, four to six. Everyone’s very actively engaged in the day-to-day operations and asset management. Like I said, those tend to be forever buy-and-hold, but of course, everything depends on the unique business plan for that assets. Syndications, you still work with a group of maybe four to six General Partners who are on the management team and making sure the business plan gets executed. But you also have a number of passive investors. And to me, that’s empowering. I wish I had started earlier. I wish I had known about this sooner, but it’s a great way for people to get started and get in the business without having to do the heavy lifting and putting– of course, doing proper vetting of the operators, but then letting them do the heavy lifting on vetting the market, the assets, the business plan, while still enjoying the tax benefits and the additional income stream. So there is a power to both methods, which is why I’m continuing to pursue both.

Rod
Yeah. And let me mention one thing to you guys. The difference between a Joint Venture and a syndication. In a Joint Venture, everyone has to be actively involved. They have to play a role. If you take money from someone and they’re not doing anything, you have to syndicate. I mean, it’s just a check to an SEC attorney. It’s not a big deal, but you have to do it right. And don’t think there’s a way to get around it because there isn’t. Everything’s been tried. Don’t even try it. If you’re going to raise money, even from family, and you’re not going to have them involved, I’m going to tell you, syndicate. Do it right. Okay? And again, it’s not that big a deal. You just have to dot your eyes and cross your T’s and just a little more paperwork. That’s the bottom line. So, you know, talk about a time when you had a little seminar, okay, in your journey where you got a lesson and what happened and maybe what was the lesson?

Vessi
There are a lot of seminars, actually.

Rod
Well, sure. There are.

Vessi
I will pick maybe one from the multifamily experience.

Rod
Okay.

Vessi
Unfortunately, just right after we got under contract on my first deal, that’s when the Fed had started raising rates and then they started raising very aggressively. We had a lender, term sheet from a lender. Everything was going fine. And I distinctly remember on a Friday, I was checking with him very often knowing that the markets are quickly evolving. I remember distinctly on a Friday evening, everything was moving on track. On a Monday morning, I got an email, not even a phone call, saying, we’re putting our loan products on freeze. Good luck. So that was devastating. Why? Because up until that point, I had worked with that lender to get preliminary quotes when I was underwriting deals. In my own little mind, I thought, okay, well, that person has already invested a lot of energy with us. I want it to be loyal. So it was really a matter of the deal is his to lose, right, if– so it was only a matter of time before we did a deal together. One thing I would do differently now is have a couple of lenders, and work with a couple of brokers. Some are okay with that, some don’t like it. As long as you’re transparent and disclosed out upfront, that’s fine. But I don’t want to be put in that situation again. I had to muster up the courage, call the broker, share the news, which is that’s the right thing to do.

Rod
Sure.

Vessi
Of course, I didn’t just break the news and run away. We had a plan of this is who we’re going to call, keeping them appraised every week, how things are progressing, and giving them the comfort that we can close and we ultimately close. But it was nerve-racking, having to literally start from zero in the middle of a deal after you’re already under contract. So that was a lesson learned. Very painful but that’s how you grow.

Rod
Yeah. No, I want to know who that lender was. We won’t do it here, but I definitely want to let the Warriors know because I don’t tolerate that crap. That’s just lax integrity on all sorts of levels.

Mark
I want to ask one more question, Vessi because I know you had you know, some commercial lending experience before you became a Warrior and started investing. And I know there’s going to be a subset of people listening to this that are going to say, oh, well, I don’t have that lending experience, and so I can’t do multifamily. And they’re going to make excuses, right? What would you recommend to those people listening right now where they start or what they do to initially learn that don’t have any real estate, any lending experience that you have?

Vessi
Yes, specifically for underwriting. And I’ll just make a sidebar. Even for me, there was a lot of learning to do on the underwriting side from an operator’s perspective, how we evaluate the deal because lenders would look at it one way, the operator a different way. In my experience was specifically with the more traditional 525 recourse loans. The agency world was a whole new experience for me. But how do you learn? Well, I’ll go back to your environment and taking the initiative to learn. There are a ton of books out there. There are a ton of forums, underwriting meetups that people can join. I highly recommend to everyone who’s interested in underwriting is pick a model, stick to it. There are a ton of wonderful models out there. People ask me, what is the best one? And my answer is usually the one that’s best for you. So you determine what works for you.

Rod
Well, I know which one is the best one. It’s ours, for God’s sake because we just got it done and it is absolutely freaking awesome. And my Warriors get it at no charge. But anyway, I had to throw that in. Sorry, I couldn’t let that pass.

Mark
Of course.

Vessi
Absolutely. I get some really cool features and I really like the new version release.

Rod
I know you were helping with it. I know Craig told me you were helping with it, which is awesome. Well, keep going. Sorry.

Vessi
So yeah, it’s joining those groups, forums, educating yourself, and then just start analyzing deals. Pick a deal and pull it, whether it’s LoopNet, [inaudible], someone sends you a deal, analyze it and do it over and over and over again. And it’s those reps that help you develop the experience. Again, for underwriting, especially in the beginning, I tell people, pick a market because each market is unique, and that definitely impacts your underwriting and your assumptions. So when you know your market, you can be more precise and accurate in your modeling and your analysis. So that’s what I would say, again, specifically for underwriting [inaudible] other areas as well.

Rod
Yeah, that is specifically for underwriting.

Vessi
Yeah.

Rod
That’s specifically for underwriting. Which is great. You know, for those of you that are analytical, that’s where you go. Yeah. And what she said about picking a market is critical because the numbers are much different. Market to market, expense calculations, you know. And if you want to help in selecting a market, I’ll give you some websites. One of them is “BestPlaces.net”. Another one is “City-Data.com”. “City-Data.com”. Another one is “DataUSA.io”, “DataUSA.io”, and of course “Census.gov” is good. Do you get any others, Vessi?

Vessi
The Census Reporter, that one.

Rod
Census Reporter, okay.

Vessi
I like to look at Median Household Income. So that site I heard out.

Rod
Well, you can get that on multiple sites, but yeah. Okay.

Vessi
Yeah, that’s a good one.

Rod
Nice. So what’s the why for you, Vessi? Because you are so motivated, you’ve kicked butt. What’s the driver?

Vessi
For me, there are a lot of things that happened in my personal life and really Covid kind of pushed things forward. I want to live a life of impact and a life of significance.

Rod
Wow.

Vessi
You can do that in many different ways, but to me, real estate is one vehicle, one path to do that. That’s what drives me every day. And part of that is living–

Rod
Or you want to make a difference.

Vessi
Yes. I want to live forever and leave a positive impact on the world. And I think that’s how you do it.

Rod
You know what’s interesting, were you at the live event we had in– was it Denver or Orlando, the last one? Mark, what was the last one we had? Denver or–

Mark
Denver.

Rod
Denver. Were you there?

Vessi
I wasn’t, unfortunately.

Rod
Okay. Well, we did a hall of fame for Warriors. First time we ever did it where we picked ten Warriors and, you know, just exemplary Warriors. You know every one of them. And we just celebrated them, gave them a nice award, had them come up on stage. And we did a little PowerPoint, one slide for each one. Every single one of them does something to make the world a better place. Build schools in India, veteran suicide, veterans homelessness, you know, sexual trafficking. They all participate and help in all of those or in one of those, each one of them, every single one. Guys, that’s a clue. You just heard what Vessi said. Okay? That’s a freaking clue. So it’s not just about you, it’s about how are you going to make the world a better place. Vessi, I really appreciate you coming on. It’s wonderful to see you. I know you can’t make the Warrior event that we’re having on March 11th and 12th, so we’ll see you in the one in September. But anyway, it’s wonderful to see you and I really appreciate you coming on the show.

Vessi
Thank you, Rod. It’s a pleasure to be here.

Rod
Yeah. Mark?

Mark
Thanks, Vessi.

Rod
Okay. Thanks, guys.

Vessi
Thanks, Mark.

Rod
See you.

Outro
So one other quick thing. We encounter so many people that are frankly frustrated. They’re looking in the mirror and they’re frustrated that they haven’t been able to escape the rat race. They haven’t been able to build cash flow to the point where they’re able to have financial and time freedom with their families. And maybe they see other people buying real estate and creating incredible cash flow and they think, well, it’s just scary. You know, buying apartments is intimidating. And I get it. See, that’s why we created our Warrior Mentorship Program. They’re our coaching students and they’ve had extraordinary results. My students, I’ve been teaching about five years and they own upwards of 140,000 units now that we know of, right? And we feel like it’s just getting going. Now, we’re looking to grow this group and really take it to the next level and honestly believe that the greatest transfer of wealth could be upon us right now with this current economic environment. Everything’s going on sale. So we’re looking for people who want to follow a proven framework, really like a blueprint or a map, literally step by step. And then they’re able to leverage our systems and our incredible network to raise money and equity to find deals and close those deals and build partnerships, really nationwide. So if you’re interested in finding out more about how you can become more in our incredible network and take advantage of the unbelievable opportunities that are upon us, you can apply to my Warrior Mentorship Program by texting the word “CRUSH” to “72345”, or you can go to “MentorWithRod.com” and what we’ll do is we’ll set up a call so you can check us out and we can check you out and see if it’s a fit. Now, again, you can go to “MentorWithRod.com” or text the word “CRUSH” to “72345” to apply, and we will speak soon.