S2E30 – Vikram Raya – How to generate $500 per month on real estate

Transcription

[00:00:03.250] – Intro

Payback Time is a podcast about building businesses wealth, and financial freedom. We try to uncover the challenges our guests faced, the mistakes they made, and the steps they took to achieve their goals. Overall objective is to provide you with a roadmap that leads to your own success. Sean Tepper is your host. Are you ready? It’s payback time.  

[00:00:32.790] – Sean

My next guest is a cardiologist who decided to create passive income through real estate investing. Eventually, his side hustle started generating enough cash flow that he was able to retire from his medical career. Now, today, he owns a real estate investment firm that allows you to generate passive income. In this episode, he breaks down how to generate $500 or more passive income per month. Please welcome Vikram Raya.an. Vic, welcome to the show.  

[00:00:59.960] – Vikram Raya

Hey, Sean. Good to be here, buddy.  

[00:01:01.490] – Sean

Yeah, good to have you. So, why don’t you kick us off and tell us about your background?  

[00:01:06.210] – Vikram Raya

Yeah, absolutely. I was trained, and my whole thought process in life was, hey, I really need to be a doctor. And it’s almost a cliche, right, an Indian person trying to become a doctor. But it was actually the first one in my family. I had a lot of people in my family have heart attacks, and I was like, all right, I got to study this. I got to learn this. The interesting thing was, once I became a doctor, I realized that the financial part is not a given, and the financial education I received in medical school is next to nothing, not only how to run a business, but how to run my financial life. And so I started reaching out to others and mentors and reading books, and I realized, hey, maybe investing could be.  

[00:01:48.520] – Sean

The way to go.  

[00:01:49.150] – Vikram Raya

And I tried options investing, and I did it the wrong way. I did it where, as a smart person, you think, hey, if I know medicine, obviously I know stock. Of course it’s a no brainer. And I got my butt handed to me in options.  

[00:02:05.840] – Sean

Right?  

[00:02:06.180] – Vikram Raya

And then I was like, all right. After I was a little bit humbled, I’m like, all right, let me try something. Not that options was right or wrong. It’s just the way I approached it was probably not the right way to go. So then I was like, all right, maybe I need to take it one step lower. I know a lot of people who don’t know even know English, and they’re crushing in real estate. Real estate.  

[00:02:23.760] – Sean

Yes.  

[00:02:24.250] – Vikram Raya

And so I learned about real estate while I was practicing, and the reason why I wanted to do that is because I didn’t want all my income coming from one source. I also didn’t want to just have no freedom. Essentially, if my practice decided to say something or do something, I was obligated to do whatever they said because I was reliant on that. And so I just thought it would make sense to grow other revenue streams. And also I have kids, I have other dreams and ambitions, and I wanted to just have space. And I think stock investing, real estate investing, investing in general is such a smart use of your knowledge and time because it will pay back dividends. And so with that said, I was like, all right, I need to learn that. So I tried single family investing, and that was really successful. And then I moved on to multifamily investing, which is buying, like, small apartment buildings. And I was really enjoying what I was doing. And I noticed other friends or family, especially other doctors, like, hey, what are you doing there? Can you help me out? And one thing led to another, and I started a company called Viking Capital, and now we serve high income professionals and investors all over the country in buying commercial real estate so they can create passive income.  

[00:03:35.430] – Sean

I love your background here. You would be, I think, the second, maybe the second or third doctor who has transitioned to investing in some way, shape, or form. Now, are you still a doctor? I’ll ask that question first.  

[00:03:51.760] – Vikram Raya

Sure. The last time I fully, fully practiced was in 2020 during the pandemic, when I was running my clinic. But when your side hustle becomes better than your main hustle, it makes you ponder and reflect a little bit. What I’ve done now is during the pandemic, it was crisis and it was opportunity. Right? There’s a Chinese character for that. And what I found was doctors all over the country were looking for help in trying to figure things out. They were like, hey, I’m scared about my practice. I’m scared about my hospital, I’m scared of my clinic. They’re also looking for business acumen and mindset and consulting and coaching, if you will. And the thing is, everything out there is all geared toward the traditional entrepreneur or business owner and nothing for the physician entrepreneur, if you will, or the doctor. And so I sort of stepped into the role of being sort of a high performance coach and a consultant for these doctors. And then on top of that, I’ve doubled down in my real estate business and really brilliant. Technically been able to retire from medicine at the age of 40. So it was nice.  

[00:05:00.070] – Sean

That is awesome. Congratulations. So let’s dive in a little bit since we’ve got a lot of retail investors in the stock markets on this podcast. They do like to learn about other ways they can create passive income. So let’s break that down a little bit. How would somebody get started if they wanted to, let’s say, hire you as a coach or a consultant to help them get started?  

[00:05:22.020] – Vikram Raya

Yeah, absolutely. Sean. I think the concept is you have an amazing tribe of listeners here on the podcast. And what they’ve done is they’ve taken their earned income, which they’ve worked really hard for, and with intelligence, they started investing and they’ve created a portfolio, maybe portfolio income. Another form of income could be passive income. And that can happen through real estate. And I think the stocks and real estate, if you do use them together, it’s such a synergy versus just using one or the other. I’m getting coaching, consulting from you, Sean. I’m learning about how to learn and get back into the stock market game because I feel like, yeah, it’s great to have all the real estate, but it’d be great to get all the dividends or the options or the recurring income I can get with stocks as well. So the way I see it is initially you want to start passive and at some point if you want to become active, that’s great. But for now, you already have, I’m assuming, a job of some sort and you have a portfolio in the stock market. Maybe you want to invest in passive income.  

[00:06:23.350] – Vikram Raya

And there are several flavors to that. In commercial real estate, there’s self storage, there are apartments, there is industrial office, commercial retailers, there’s all these different buckets and you just want to figure out what makes the most sense. I’m risk averse, I’m a cardiologist and I like to stress test everything. Sean and what I found was, of all the asset classes out there, I felt multifamily is the safest.  

[00:06:48.430] – Sean

Sure.  

[00:06:48.730] – Vikram Raya

And the reason why is everyone needs a place to live. It’s not a luxury, it’s a need. And so what we found is, in the last 70 years, in all the market cycles, there are small periods of contraction and large periods of expansion in the real estate market, and specifically, multifamily rent has been going up every year since the end of World War Two, which that’s 72 years of rent growth. So I really am bullish on this. And as long as you have the capability to have a longer time horizon, meaning if you’re needing something in three months, six months, nine months, maybe it’s not the right vehicle, but if you can hold for at least a couple of years, you will find the right time to buy and sell and you will be profitable.  

[00:07:28.840] – Sean

Right. I was actually doing a stock review of a company called Capco, which builds mobile homes, which aren’t too glamorous, but they build module homes which think of them like part of homes built in a factory. They deliver them on site and they can build them really fast. You can build homes really quickly given your home isn’t going to be custom, it’s going to look like other homes in the neighborhood, but you’ve got the pre wiring and the tech and the smart home tech all there. The reason is I’m paying attention to that type of home and the renting industry a lot because I don’t have the exact statistics, but you’d probably have a little more knowledge here than myself. But 2008, home building slowed down, but one thing that did not slow down is people making more people. Where are people going to live? Right. That’s why renting is the primary option and rent keeps going up.  

[00:08:21.750] – Vikram Raya

Sean, let’s say we are going through this, if you want to call it a recession, a correction, a pullback of some sort. The stock market was treading in some bearish territory, but overall, I still think if you’re wise, you’re looking for, this is finally I finally I have a buying opportunity. Right. Or if you’re looking at this in terms of rent growth, I can’t afford to buy a home. Interest rates are really high, and there’s not that much supply. So it’s really expensive still, even now, to buy a home.  

[00:08:49.430] – Sean

Right.  

[00:08:49.880] – Vikram Raya

That being the case, most people will still rent. That’s it. And then during the pandemic, a lot of households there’s shrinkage of households because people went back to live with their parents, everyone started bunking up, and now that’s reversed, and now there’s a bunch of households being created. And so if people are not going to buy a home, they’re going to rent. That underlying premise is why I think we’ve done well as a company. And within the United States, I’ve chosen the Sun Belt as a place to invest because that’s the net migration. That’s where jobs are going, that’s where the employment is going. And so if you use these metrics when you’re becoming a passive investor, you’ll be successful, similar to what you teach in your program in Tykr as well. It’s science. It’s not hearsay. It’s not like a gut feeling.  

[00:09:39.150] – Sean

Exactly.  

[00:09:40.530] – Vikram Raya

You’re a fundamental investor, and that’s what I recommend for real estate investing.  

[00:09:44.490] – Sean

Nice. So let’s dive into your business model a little bit. So you mentioned multifamily is your focus, correct?  

[00:09:51.280] – Vikram Raya

That’s right.  

[00:09:52.190] – Sean

And how many units are we talking? Like four units, eight units more?  

[00:09:56.280] – Vikram Raya

Yeah. So I started when I was just me and my business partner. When we were first starting up, we had maybe two, four, six kind of thing. We’ve gradually progressed, and the largest acquisition we’ve done is about 400 units. Where we bought these are large apartment complexes with on site property management, things like that.  

[00:10:16.260] – Sean

Nice. Okay, so an investor, if a listener wants to get started in something like this, do they need to be accredited or is it really open to anybody?  

[00:10:24.930] – Vikram Raya

So we have options for both accredited and non accredited investors in our company. And so if they want to find out more, vikingmultifamily.com is our website. But really, the premise is, whether it’s us or someone else, there are ways to get involved, even if you have $5,000. And the reason why I say that is it’s just got to start, and you got to learn as much as the key number one is empowerment education. So read as much as you can, learn about whatever asset class you’re trying to get into, and then start small and then keep an eye on that and see how that does. And if you find that to be successful, then you can obviously increase. So the way to invest in other companies are things like fundrise and Yield Street and other city vest where you can invest smaller amounts in larger projects. When you work with people like me, we’re called syndicators or sponsors. Usually you’re straight to us versus those guys are intermediary. And so if you’re coming right to us, usually 25,000 is the minimum investment, and usually 50 is an ideal size for us.  

[00:11:32.720] – Sean

Got it.  

[00:11:33.260] – Vikram Raya

Obviously, it goes up higher than that afterwards. But what happens then is the returns you’re going to get are I’ll give you an example. We have a fund right now, and we have three sets of returns. There’s a Class A investor that gets a straight 10% return, and they don’t participate in the upside, but they get nice. That 10% coupon, which is really powerful. Class B investor gets a 7% return and they get a 70 30 split. What that means is any profit after the 7% they get, that 70% they get, and 30% we as a sponsors get. And then on sale, they get 70% of the profits, and then we get 30%. And so it comes out to, if you use the word equity multiple. Equity multiple. All that means is, let’s say I invested $100,000 and I got 200,000 back at the end of the investment. That’s what we call a two X equity multiple. Essentially, how many times double did your initial investment go through? So the Class B investor I was just mentioning, which gets the 7% and the 70% split. We’re trying to target about a 1.8 to two X multiple for them in three to five years.  

[00:12:36.440] – Sean

Nice.  

[00:12:37.160] – Vikram Raya

And then there’s last class investors. As we’re starting to get well known in the industry, we’ve been attracting higher amounts of capital. And so we have something called Viking Reserve, and they invest about a million dollars, and in return, they get an 8% prep return and an 80 20 split. So they get the best returns we can ever give, and they’re getting about a 2.2 X multiple.  

[00:12:59.310] – Sean

Nice. Okay, so to use the nice round number, let’s say 50 grand, somebody went in and they’re getting 10%. Is that 10%? Like I’m looking at 50 grand, 10%, $5,000 per year. Got it. Okay, that’s where I was going. So you break that out per month.  

[00:13:17.680] – Vikram Raya

We pay monthly, so we pay monthly. So it’s almost like a check coming in.  

[00:13:22.420] – Sean

That’s where I’m going. So you can run a simple math. What is that, about $400, some dollars per month?  

[00:13:29.260] – Vikram Raya

Yeah, something like that. And the other cool thing that this is why if you invest in stocks, you may want to take advantage of some of the real estate as well is let’s say you invest $100,000. I’m probably able to give you a write off about $90,000 year one. So that bonus depreciation costs. That write off is a real estate loophole for taxes that the government willingly gives you because they like people investing in real estate. And so that can offset passive gains anywhere. And that’s why I really like that.  

[00:14:03.040] – Sean

Yeah, that’s another reason why I really like real estate is let’s say you run into a situation where you sell a home or you sell another property, you’re going to have to face capital gains. But if you can go back into real estate, that’s a shelter, something like you, that would work. And then I think a lot of businesses out there, like entrepreneurs, let’s say you sell a business and you’ve got two 3510 million coming your way, while you don’t want to pay 40% to 50% capital gains tax in the US. Right? Right. So they could go to you and be like, okay, the million dollar fund, your premium fund you just mentioned, you can start putting money in there and that’s sheltering, that tax.  

[00:14:45.210] – Vikram Raya

Absolutely. And I’ve had it where we’ve had some really big exit. And when the market is correcting like it is now, I’ve had people take their stock returns now, and I mean their real estate returns and put it in the market now because they’re trying to take advantage of it’s, like arbitrage. Where is opportunities in real estate great? Is it in stocks?  

[00:15:03.110] – Sean

Great.  

[00:15:03.350] – Vikram Raya

But be aware, and obviously at the beginning you want to learn one thing and learn it well. But over time, if you can understand a couple of different, I guess, asset classes, you can use the velocity of money to go back and forth.  

[00:15:16.930] – Sean

Yes. Smart. I’m curious, you mentioned the 400 unit large complex. How many other projects like that have you?  

[00:15:25.650] – Vikram Raya

We’ve done 26 projects like that all over the country. We have about $650,000,000 of real estate we transacted upon. And yes, the goal is to do about six of these a year, like between 204 hundred units. Right now, we’re on track to do about six this year. It’s really just because we’ve built up a team and we go all around the country and we’re looking for opportunities. Like, you look for opportunities in stocks and you see when things are oversold, and you see when people have sold based on fear and emotion and not based on the fundamentals. This is what we do too. And then the thing we go in is we go in and buy these assets and we do a couple of different things. We improve the interiors, improve the exteriors, we re badge it, we rebrand it. We improve the tenant profile and raise the tenant profile. And even operations, we use things like artificial intelligence to help with the leasing algorithm. And all of this in a short amount of time creates what we call forced appreciation. So because of our money invested in these assets, plus our strategies, we’re forcing the rents up because of the improvements.  

[00:16:33.740] – Vikram Raya

And then on top of that, we have organic appreciation because we’re buying in Atlanta, in Phoenix, in Tampa, where there’s tons of jobs, tons of growth, low supply, high demand, and then there’s an organic bump. And so you combine the forced appreciation with the organic appreciation, and then you have a winning formula.  

[00:16:50.210] – Sean

Nice. Let’s take a quick commercial break. Hey, this is Sean.  

[00:16:54.220] – Vikram Raya

I just want to say thanks a.  

[00:16:55.290] – Sean

Lot for checking out this podcast. I know there’s a lot of other podcasts you could be listening to, so thanks for checking out this one. Could you do me a quick favor? If you haven’t done so already, could you leave us a five star rating on either Spotify, Apple Podcasts, Google, or any other platform you use to listen to podcasts? What this will do is help us rank higher in the podcast search engines, you could say. So that would be much appreciated. Also, if there are any questions you want me to ask the guests for a specific topic you want me to address, please go to our Tykr Facebook group. You can leave a comment there and I’d love to hear what you have to say. All right, back to the show. Now, you mentioned location. Location is hot. You mentioned the Sun Belt. I’d like to dive in a little deeper. I will say a city that’s west of Milwaukee is Madison. Madison has experienced a ton of growth, of course, university, a lot of students coming there, but then a lot of new businesses, a lot of tech businesses. And you got Epic, which is involved with the healthcare space, right?  

[00:17:57.960] – Sean

Yeah. A lot of these large we’re talking 400 unit complexes going into place. Whoever made the decision, right. Seeing that growth of Madison, that’s a home run because you know there’s going to be close to, if not 100% occupancy in these buildings. So I’d love to learn. Where are you putting your buildings, these projects?  

[00:18:19.750] – Vikram Raya

I say Sun Belt, but there’s a few markets. Just like you mentioned, madison is on our radar. Another one on our radar is South Bend, Indiana. The reason why is Notre Dame is right there, and there’s a lot of media and ed population. What does that mean? That’s medical and education, like professors and things like that. And so we bought a really big project down there. And it’s because of that vibrant. It’s become sort of a mini tech hub. It’s become an educational hub and it’s just attracting high quality renters. Yes. That’s a very poignant that you said Madison, because I like Madison.  

[00:18:57.310] – Sean

Right. And I love that. With businesses like yours, you’re using that, the data analytics AI to really determine where the hot areas in the US. You think of right away. Okay. There’s San Francisco, which we know is hot, maybe questionable because people are leaving to work remote, but there’s other that’s.  

[00:19:16.390] – Vikram Raya

The interesting thing, Sean. It’s like there’s a flight to growth. I was listening to your podcast, we were talking about Tesla and Meta and things like that. But sometimes there’s these other opportunities of coming up, of these up and coming companies. And so the Chicago’s, the San Francisco and New York of the world, they used to be the hot place. But now because remote and virtual working has opened up the whole country, people are saying, hey, I actually want to enjoy amenities. I want to have space, I want to go hiking. I want to do all these fun things and work. And so that’s why spots like Phoenix have just exploded. Phoenix, Tampa, Austin, Atlanta, the Carolinas, these are the markets where we really are thinking there’s a general sort of a boost in the local economies in the markets.  

[00:20:07.150] – Sean

It is very similar to the way we look at businesses because you want to find strong areas where there’s going to be serious growth, like in the type of business models we look at. But in your case it’s like prime real estate, like what cities are growing the most with industry, like tech right away comes to my mind because I’m more of a tech entrepreneur. Well, you’re going to need homes, you’re going to need complexes to serve those that are moving there. So that’s awesome.  

[00:20:33.080] – Vikram Raya

Absolutely.  

[00:20:34.090] – Sean

I really like your business model for multiple reasons because I met with quite a few real estate investors on here that they’ll do the work, they’ll invest in, like, let’s say it’s a single home or duplex, you got to do the renovations. And then if you don’t hire property management company, you have to go do the maintenance yourself. I like this investment because it sounds like if you have a few investors out there, let’s say a busy professional, you’ve got doctors who are working with you, they don’t have time to do any of that. They can give you the money and they’re pretty much asking you, please deploy this so I can get my residual paycheck every month. I love that.  

[00:21:11.570] – Vikram Raya

Yeah, and I think that’s exactly why I want to cater to the busy professionals out there. Moms and Dads, they’re working their W two S, but they have some income and they want to deploy that. So one of the cool things is like we’re buying a deal, for example, from Blackstone. And so this is starting to become a little more institutional level, meaning a lot of big companies out there are buying similar types of real estate and they’re buying we can afford to buy maybe one or two of these projects at a time. They buy like eight of them. And so it’s interesting to see where the big money is flowing and we keep an eye on that because it makes sense because they obviously know things. I’m curious, is the same thing happen in stocks? Where do you see where the big institutions invest and does that make a difference in how you invest?  

[00:22:04.570] – Sean

It does to a little degree. It’s not the main reason, but we like to focus more on the blue chip, the large cap stocks, which already have the institutional investors. There are investors that come to me every once in a while with small cap ideas, and they’ll usually in Tykr. They’ll be overpriced, they’ll be red, but they’ll be speculating. But this industry is really growing, or this could happen. I always like to use the point, like, what about the big institutions? If they’re not getting involved, what should you do? You, on your own are not smarter collectively than, let’s say, 1000 analysts at one company. Right. And when I start phrasing, it like, that’s a good point. I’m like, let the big institutions play with their money first, and then when it starts moving, that’s when you can go in, let them test.  

[00:22:58.710] – Vikram Raya

You don’t want to be the pioneer. You want to follow the crowd a little bit. Yeah, I like that. Exactly. We sort of do that too. We’re like, all right, where’s all the money going?  

[00:23:06.260] – Sean

Yes.  

[00:23:06.530] – Vikram Raya

All right. It’s a proven market. Let’s go in. But you also don’t want to be too late to the party.  

[00:23:11.660] – Sean

Yeah, right. Some people wait years. Fortunately, with stocks, you get to a certain point. Share price is a good reveal. Like, for example, we’ve got education in our site that teaches people, don’t get involved with penny stocks. Anything that’s less than $5, there’s a 99.9% chance it’s never going to break up past five. It’s because institutions are going to touch it with a ten foot pole. And then anything between five and ten this is US dollars. Anything between five and ten, there’s a 90% chance it’s never going to break out. So I tell people, let it break out past ten. When it starts to move a little bit and you start seeing some big institutions, that’s the green light. Like okay. All right. I see you. I’ll put some money in.  

[00:23:54.680] – Vikram Raya

So, Sean, just like you’re saying about that tier system, we use the tier system in real estate. So there’s A-B-C and D type of apartment complexes. So the D is like a war zone. You don’t want to go anywhere near that thing. It shows up on the news for not the right reason. The C class is a good one. That’s how we got started. It’s working for us. It’s blue collar and there’s a lot of renovations we had, but there’s usually a lot of pop that happens. The only problem is, during downturns, those are the ones who lose their job the first. And so we like the A’s and BS. The BS are essentially gray or white collar. They’re in stable areas, and with a little bit of renovation money, you can really get them to that next level of asset class. And you say fees are like one paycheck away from losing their rents. BS are like, you know what? They got six months of rent built up. They have the capability to handle their car breaks down. They can pay for the car and their rent. And then the A’s are people who usually like to rent by choice.  

[00:24:56.830] – Vikram Raya

And so those are really good during this part of the economic cycle. So we’ve graduated now to the BS and A S. And similar to your price point of when to invest in stock, it just caught my eye when you’re saying that.  

[00:25:09.330] – Sean

I love how you broke that down, because I’ve had other people kind of dabble in the explanation. It wasn’t as clear. So that is actually crystal clear, rent by choice, because I know a few people. Their kids have left the home. They graduated college. They now have gained full employment. They no longer need to live off the folks. And the folks are like, I don’t want to cut my lawn anymore. I don’t want to shovel snow. If you’re in the northern states and we’re going to downsize and rent, we’ve got a little more freedom here. That’s a perfect scenario.  

[00:25:41.950] – Vikram Raya

These are some of the strategies we like to use if anyone is interested in finding out more. I think the first step is education. And so learning to like, hey, what is Ppm? What is syndication? How do I invest in a market complex? What does it all look like? Where’s my money held? Do I actually own the actual stock or do I own a stock or actually do I own the real estate? And that’s a big difference between a REIT and a real estate investment. With us, you actually own the dirt. You actually own a piece of that building. And so it’s a tangible asset.  

[00:26:12.680] – Sean

Sure. So that’s a nice place to be, because if you were to sell, like, let’s say one of these properties were to be bought for a really nice penny, everybody who has invested, they’re going to get a piece of that, correct?  

[00:26:23.990] – Vikram Raya

Absolutely. And then also that’s also why I can pass on the tax breaks from owning real estate to my investors, because they’re actually owners of the real estate, unlike the REITs. There’s nothing wrong with the REITs, but it’s really more of a stock transaction versus actual real estate transaction.  

[00:26:39.110] – Sean

Sure. Now, how long because I know you’re kind of doing this in parallel to running your medical practice. How long have you been doing this? Total? How many years?  

[00:26:47.350] – Vikram Raya

I started real estate investing in 2012 and that’s 2011 is when I started my cardiology career, and then 2015 is when I started the transition to multifamily. So ten years of real estate, about seven years of the multifamily.  

[00:27:02.470] – Sean

Now, this is a fun question here. I always like to ask people a lesson learned or a mistake they made along the way. Can you share a story with audience?  

[00:27:10.990] – Vikram Raya

A lot of mistakes. I think it’s just about getting back up and then believing in your premise that, hey, This is going to work out. But one of the things is partnerships. We’ve learned most entrepreneurs, startups companies, it’s collaboration, it’s relationship building. And there’s a quote one of my mentors like to say, he says, your contacts get your contracts right and your network is your net worth. And so you have a tendency to wanting to work with people. The problem is if you choose the wrong people, it can set you back a year or three years where you can potentially derail your whole company. So I’d be very careful, no matter what industry your listeners are listening from, just be careful that the interest are lined. The person who’s being your partner is actually going to live up to what they promised and make sure that there’s exit clauses and if possible, try to maintain voting ownership when you’re making your collaboration. So there’s some of the basic, I guess, lessons I’ve learned from that.  

[00:28:21.470] – Sean

Yeah, good advice there. What I like to do is flip that equation. Can you share with us your biggest investment to win?  

[00:28:29.110] – Vikram Raya

It was one of our early ones. We bought this sort of project in south part of Atlanta. It was our first deal where we were doing it ourselves versus partnering with other folks. And there’s some economic bad news that happened and so the initial person who the deal was awarded to backed out and they gave us opportunity to come in. We were wondering, hey, look, I don’t know, this seems risky because if they backed out then why should we come in? But when we analyzed it, we looked at the numbers, we talked to the city, we visited the property several times, we looked at all the data and said, you know what, that’s an anomaly, I think this deal makes sense. And we went in and I think we ended up buying the deal for 5 million. And we bought the deal next door for 3 million. It was 8 million total and we ended up selling it in three years for 13 million. So that was like a really big win for us and it actually had proof of concept, hey, look, this actually think this works, and gave us confidence to say, hey, maybe we can back off a little bit on our jobs and start focusing on this a little bit more.  

[00:29:33.270] – Sean

Great. I love it. Is there a question that I should have asked but did not ask? This is one of my last questions I always like to ask before we jump in the rapid fire round.  

[00:29:43.000] – Vikram Raya

Yeah. If real estate is so good, Vic, why how come everyone doesn’t do it?  

[00:29:47.280] – Sean

There we go.  

[00:29:50.230] – Vikram Raya

That’s a good question. I have to see that for my podcast. Sean, if you could answer that.  

[00:29:55.490] – Sean

Yeah, that is good.  

[00:29:56.420] – Vikram Raya

All right, so it is great. The problem there’s liquidity, right? If you need the money in six months from now, it’s hard to get that money out of an investment because it’s relatively liquid. I mean, you actually need to sell the whole asset for you to exit. So that’s one of the things. And two is a lot of people are not patient with the time horizon in general. Any real estate asset in general, if you hold it long enough, you’ll be fine. The problem is people don’t have that. Maybe they don’t have that time horizon sometimes. And number three is don’t buy on speculation. Try to buy on cash flow. A lot of times people hear horror stories or bad stories. One, if they’re not professional managers, then they try to manage it themselves. That’s usually a problem. And number two is they’re buying on speculation. They’re assuming things are going to go up when the fundamentals are not there. So we buy on cash flow, and obviously we hope that there’s appreciation, but we don’t need it for the deal to work.  

[00:30:55.990] – Sean

Patience is the key word there I extracted because there’s a lot of people in the stock market too. They want to put in 100, and then they let it sit. They let it sit for one month, two months, six months, and it’s not growing fast enough. We have to keep putting money in that’s one. You have to be patient. This takes time. So it’s very similar to your situation. You can’t just put the money in once and then you got all this residual. It’s like you put it in, but you’re going to have to keep putting in more, I imagine, to increase your residuals thereafter.  

[00:31:26.660] – Vikram Raya

Absolutely.  

[00:31:28.150] – Sean

Well, awesome. What I’d like to do next is transition to the rapid fire round. This is where we get to find out who Vic really is. You ready?  

[00:31:34.880] – Vikram Raya

Okay. Yes.  

[00:31:36.090] – Sean

All right, if you can try to answer each question in 15 seconds or less. What is your favorite podcast that you listen to?  

[00:31:45.190] – Vikram Raya

I like listening to Ed Milet. What’s it about? He’s like entrepreneur. He’s a successful investor, business guy, but it’s on mindset, it’s on growth. It’s just the way he brings on really sort of high powered guest, and he asks some really good questions to where you get you glean really tremendous information out of it.  

[00:32:08.950] – Sean

I’ll check it out.  

[00:32:09.620] – Vikram Raya

It’s called Edmilat Show.  

[00:32:11.430] – Sean

Writing that down right now. That’s a good one. All right, next question. What is the recent book you read and would recommend for anyone who has.  

[00:32:20.500] – Vikram Raya

Any entrepreneurial bone in their body? It’s called $100 million offers by Alex Vermosy. And this guy, he’s essentially retired. He’s financially free. He’s only probably in his early 30s, but he’s sort of been to the mountaintop and he’s like, it’s not as impressive as everyone says. So I’ll give you an example. He just did a YouTube thing on Everyone Wants to live this million Dollar lifestyle. I’ll tell you exactly how much it costs to live a million dollar lifestyle. You want a private jet, you want to drive a Ferrari. You want to wear a nice clothes, and you want to go to all the nice restaurants. Let me tell you exactly how it’s not as much as you think. And he broke it down to if you can make $300,000 a year, you can live a million dollar lifestyle or a billion dollar lifestyle, whatever. So I thought that was really cool that we chase numbers because we think that’s what we need to live our life. But in the end, first of all, when you get the things you really were chasing, it’s like, okay, now what? He’s like, it doesn’t cost that much.  

[00:33:18.960] – Vikram Raya

And too, when you get it, you probably want you’ll be underwhelmed.  

[00:33:22.470] – Sean

Yeah. You arrived there, and it’s kind of like, oh, after a week, really? That’s it? And after a month, it’s like, okay, what’s next?  

[00:33:33.970] – Vikram Raya

Give an example. I was with my family in Italy for a whole month. It was one of my bucket list things like, can I leave my companies, let it run without me, and go live in a foreign country with my family and just have a good time? And I did. I was like, you know, at the 25th day, I was like, I’m itchy to come back. I’m like, no, it’s good, but only so it’s pasta pizza. You can eat that’s.  

[00:33:54.710] – Sean

It really good for the waistline.  

[00:33:56.810] – Vikram Raya

Yeah, I was itching. And that’s when you know you have a calling versus a job, right?  

[00:34:03.650] – Sean

Yeah.  

[00:34:06.370] – Vikram Raya

Even if someone paid you not to do work on Tykr, I think you would say, Forget that. I love what I do.  

[00:34:12.610] – Sean

I love it. You’re right. I mean, I go back ten years, I was like, still in that position. I want to find that business, something I’m passionate about, something that’s a lot of fun to work on. Didn’t have it. I’m like, Man, I just want to build a business, sell, and I can go do whatever I want. And it’s funny how you do arrive. Like you said, some kind of calling, a passion. And you’re right. I love doing that. Yes. Glad you’re there as well. I got a few questions here that relate to advice. We’ll start with worst. What is the worst investment or business advice you ever received?  

[00:34:47.770] – Vikram Raya

That’s too risky. I wouldn’t do that if are you.  

[00:34:50.620] – Sean

I’m sure you heard that once in a while.  

[00:34:52.640] – Vikram Raya

So it’s essentially like your mom telling you not to get doing that. And the other thing is, look, everyone listening to the podcast. They’ve all trained in a professional job. That doesn’t mean they have to stay there. That’s just what they chose at that time. So I really think the people of the future, we’re probably going to have seven to nine careers in our lifetime. I think our kids growing up, they need to learn to be super. They need to be metal learners and learn to be adaptable and flexible. And anything they’re learning is essentially irrelevant. Within 24 months to potentially a couple of years. Like, all my medical school books are outdated. Most of the stuff I learn in college is underutilized or not utilized at all. So it’s like I consistently learn week to week, month to month, year to year. And that’s what I use on a day to day basis. And so it’s like, be continuous, learner and flexible, adaptable.  

[00:35:45.200] – Sean

Right. And that probably relates to I was going to flip that equation there as the best business advice or investment adviceLONG. Learner. Cool. And one more question. Here is the time machine question. If you could go back in time to give your younger self advice, what age would you visit and what would you say?  

[00:36:02.950] – Vikram Raya

Take more risk, start earlier and know that’s all going to turn out fine. And then anything that I was really emotional about, if there’s a way to just say, just take it in more stride versus take fall apart.  

[00:36:21.100] – Sean

Right.  

[00:36:21.810] – Vikram Raya

There’s things like breakups, not getting into something or getting into something. All these things in general, they’re irrelevant down the road. So it’s like one of the mentors I listened to said I think it was Naval ravikant. He says this. He says only 1% of the decisions you make actually matter. The key is learning. Out of the 99, what’s that 1%?  

[00:36:46.410] – Sean

You know what? There’s a lot of wisdom there because I try to remind myself of that too. It’s like if something is stressing me out or starting to increase blood pressure, I have to take a step back and be like, is this really worth it? Because I bet in, like, three months, this is going to seem stupid or three years or whatever, right? Very much.  

[00:37:05.380] – Vikram Raya

That the other thing I’ve learned is at the beginning, you want to accumulate a lot of money for a couple of reasons. One is most problems for most people, I think, can be solved for $100 or less. And then let’s say you’re having bigger problems, but maybe it’s going to be $500 or less. And I’m at the point where it’s like, okay, if it’s $1,000 or less, I don’t have a problem. Right. And what that means is money will help you solve all the money problems. And what you’re left with is the other real problems that now you can focus on because you’ve solved all the money problems. So it’s really important, I think, to create that financial wealth and then that cash flow machine.  

[00:37:43.790] – Sean

Right on. Right on. Well, this has been great. Vic really appreciate your time or backstory and really how to get involved with your company if you want to produce some residual cash flow. So where can the audience reach you?  

[00:37:55.220] – Vikram Raya

Yeah, absolutely. Vikingmultifamily.com is our company called Viking Capital, and we’d love to have an opportunity to bring you guys into the fold, educate you, show you that these alternative investments that a lot of the 1% are using to really create wealth awesome.  

[00:38:12.480] – Sean

Well, thanks, fake. We’ll see you.  

[00:38:14.220] – Vikram Raya

Absolutely.  

[00:38:19.790] – Sean

Hey, I just want to say thanks for checking out this podcast. I know your time is valuable and there’s a lot of other podcasts out there you could be listening to. So thanks for taking the time to listen to my guest story. If you did enjoy this podcast episode, could you head over to itunes and leave a five star review? That would be much appreciated. Thank you. And last but not least on this podcast, some episodes we do talk about stocks. And please keep in mind, this podcast is for entertainment purposes only. So if you did hear any buy or sell recommendations, please don’t make those decisions based solely on what you hear. All right, thanks a lot. See you. You.