RG 337 – Outsourcing Underwriting in Commercial Real Estate with Abhi Jain
Don’t know how to underwrite deals yourself? Can’t afford a full-time underwriter for your business? If you’re having problems with your underwriting—or simply want to make the process easier—let’s talk with my good friend and own service provider—Abhi Jain.
Abhi Jain is the CEO and Co-Founder of RealVal Private Limited, a real estate financial analysis & accounting firm that helps clients fulfill their needs with the best quality service possible. He is also a seasoned consultant, helping clients work on acquisition & disposition underwriting, budgeting & forecasting, waterfall modeling, and much more.
Relative to the other real estate service providers we’ve interviewed in this show, Abhi offers a unique yet extremely valuable service to investors. In today’s interview, Abhi walks us through how his business works, including how they maintain the quality of their services, produce accurate results and essentially help clients make the best decisions for their business.
Interested in becoming an Investor with Reed? Click here to join his Investor email list.
Abhi and his partners at RealVal provide an invaluable service to investors that cannot underwrite on their own or afford full-time underwriters. Find out how RealVal can help your business make the right decisions and why underwriting is so vital in real estate by tuning in to this week’s episode.
Key Takeaways
In today’s uncertain environment, you have to be careful about your assumptions on numbers.
Data collection is a key step in financial analysis and underwriting.
You can make bad decisions if you don’t know how to underwrite.
- Outsourcing underwriters is an excellent option if you can’t afford a full-time underwriter or don’t have the time or energy to do it yourself.
LINKS
https://www.linkedin.com/in/abhinandanjain11/
https://www.therealval.com/
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Podcast Transcript
Reed Goossens (00:00):
Good day Good day guys. Now, before we dive into today’s show, I want you to let you know that some of you may be aware that over the past eight years, I have built a substantial multi-family real estate portfolio here in the US worth over half a billion dollars. And in that time, my passive investors have received fantastic double-digit returns. And now you too can invest directly into my deals for as little as $50,000. So if you’re an interested investor, head over to reed goons.com to find out more. That’s reed goons.com. Now, back into the show,
Abhi Jain (00:39):
A couple of clients are having difficulties raising investment as well. So that’s also because they don’t have time to, uh, connect with different investors, uh, uh, uh, develop their network. But I also suggested them to maybe start podcast, go start going on post, uh, podcast of different people so they, they’ll know different, uh, investors. What they’re doing is they’re doing the property management on their own right now, so that takes a huge, a lot, huge lot of time for, and they don’t, um, get time to connect with different people. So that’s one thing that I think every, every real estate investor should consider, is investing their time and more, um, like value adding things rather than doing repetitive tasks that anyone else can do for you.
Speaker 3 (01:42):
Welcome to investing in the US, a podcast for real estate investors, business owners, and aspiring entrepreneurs looking to break into the US market. Join Reed as he interviews go-getters, risk takers, and the best in the business about their journey towards financial freedom and the sheer joy of creating something from nothing.
Reed Goossens (02:02):
Good day good day, a ladies and gentlemen, and welcome to another cracking edition of investing in the US podcast from Los Angeles. I’m your host, reed goossens. Good as always, Debbie with us on the show. Now, I’m glad that you’ve all tuned into it to learn from my incredible guests, and each and every one of them are the cream of the crop here in the United States when it comes to real estate investing, business investing, and entrepreneurship. Each show I try and tease out their incredible stories of how they have successfully created their businesses here in the us, how they’ve created financial freedom, massive amounts of cash flow, and ultimately created extraordinary lives for themselves and their families. Life by design, as I like to say. Hopefully these guests will inspire all of my cracking listeners, which are you guys to get off the couch and go and take massive amounts of action.
Reed Goossens (02:49):
If these guys can do it, so can you. Now, as you know, I’m all about sharing the knowledge with my loyal listeners, which is you guys, and there’s absolutely no BS on this show, just straight into the nuts and bolts. Now, if you do like this show, the easiest way to give back is to give us a review on iTunes, and you can follow me on Facebook and Twitter by searching at Reed Goossens. You can find the show wherever you podcast on iTunes, SoundCloud, Stitcher, and Google Play. But you can also find these episodes up on my YouTube channel. So head over to reedgoossens.com, click on the video link, and it’ll take you to the video recordings of these podcasts where you can see my ugly mug, but the beautiful faces of my guests each and every week. All right, enough outta me. Let’s get cracking in into today’s show.
Reed Goossens (03:36):
Turn the show by the pleasure of chatting with a good friend of mine and an all round good bloke. Abhi Jain. Abhi is the CEO and co-founder of RealVal Private Limited, and Real Val helps real estate investors and syndicates outsource their real estate analysis and underwriting. They have a huge team of analysts who manage and prepare underwriting. They build models, they prepare pitch decks, and they help their clients with asset management. Now, Abhi helps his clients also expand by improving their underwriting processes and by training and specializing talent at RealVal for fulfilling their re respect needs and overseeing all the quality control that goes on with underwriting. Now, Abhi’s ex area of expertise is actually analyzing multi-family re talent office and has helped his client’s close on more than 1 billion worth of real estate deals. I’m really pumped and excited to have him on the show today to share his incredible knowledge and his insight, but nothing to me. Let’s get him out here. Good. Abhi, welcome to the show. How you doing today, mate?
Abhi Jain (04:29):
I’m good. Thanks so much for having me reed,
Reed Goossens (04:32):
Mate. My pleasure. And for those listeners out there, um, I use realVal, right? I’m a I’m a I’ve been a client of RealVal for a couple of years now, and, uh, we’ll get into, you know, what, uh, Abhi does, but it’s also Abhi’s first time being on a podcast. So, so welcome to to the podcasting world. It’s, it’s a great way to get you a message out there and what you do, but before we get into all of the good stuff and all the, the juicy bits and the meat and potatoes, as we’d like to say on this show, can you rewind the clock and tell me how you made it your first ever dollar as a kid?
Abhi Jain (05:01):
Yeah, so, um, like I have, uh, always been in India and I, um, in India we don’t generally start, uh, in the early stage in the teen, uh, like, uh, in early teenagers. So what we do is basically, um, study all until graduation and start our job right after that. So, uh, it was similar thing for me too. And, uh, my first, uh, earning was with an, um, auditing company. I am a chartered accountant, so I was an intern with them, and I was an auditor. Uh, so we used to, uh, audit multiple companies with, uh, from different industries. So that’s my, uh, that’s my first thing. I used to use that, uh, stipend, uh, a small stipend that’s like, it was 6,000 bucks in, in n r mm-hmm.
Reed Goossens (06:03):
Is that a week of a month? Wow.
Abhi Jain (06:05):
A month. Yeah.
Reed Goossens (06:06):
That was your starting job coming outta university. Yeah.
Abhi Jain (06:09):
Yeah.
Reed Goossens (06:09):
That’s incredible. That’s incredible. Um, tell me how your relationship with money is in India when you’re growing up. Like, did your parents have, did they talk about it? Did they, you know, were, were people talking about building businesses or was it just all about study, study, study, get the best job you can and then, you know, save after that if, if there’s any saving?
Abhi Jain (06:27):
Yeah, it’s majorly similar to like, uh, having studies, uh, as your priority. They’re, uh, uh, initially our parents, my parents are not that well educated. They, uh, haven’t completed their schooling either. Mm-hmm. My father is a businessman and, uh, he always wanted me to, um, be a part of his business as well, but it wasn’t something that I enjoyed, and that’s something into manufacturing. So, um, I started, I wanted to do something, uh, which I’m studying, like, uh, something that relates to my study. So, um, I really liked finance, uh, building models and everything. So I, uh, started working on those kind of things. And here I am,
Reed Goossens (07:17):
Here you are today. And, and, and you, you mentioned earlier you’re a chartered professional accountant, so where did you go to training to get your chartered license?
Abhi Jain (07:25):
So, uh, it’s equal into cpa, so mm-hmm.
Reed Goossens (07:42):
Awesome. No, it, it, it’s, it’s incredible to see so much product in other countries. So highly skilled, right? And, and part of this evolution of, and we’ll get into the story of how you built RealVal, but the evolution of outsourcing, you know, high quality product and services to, you know, parts like India, the Philippines, you know, me, parts of Mexico. Um, you know, I I I’ve been using virtual assistance for, you know, 10 years right? In different various forms. Uh, and it’s just such a international business now these days that, that, you know, if the talent within your home country isn’t up to snuff, you know, there’s so many other people out there that at a click of a button, you know, and, and we connect, you know, all the time, that’s so easy to, to find really, really good talent at reasonable rates.
Reed Goossens (08:32):
You know, like, you know what, what I would pay for someone of your expertise here in the States is a lot more than what I pay, you know, you guys because it’s outsourced, right? And that’s not necessarily a, a criticism, it’s just more of how, you know, when you’re running a lean startup, you gotta find the best talent for the, you know, the, the most reasonable prices. Um, but with that being said, talk to me how you built RealVal, because that is, is such an interesting, it’s a, it’s a concept that I have had personal to my heart, and I can get into the backstory of how we met, but I wanna hear your, like, how you got into RealVal and what, why was there the, the impetus to start a company in underwriting services, specifically focused on, you know, commercial, uh, multi-family or commercial real estate, I should say. Yeah.
Abhi Jain (09:15):
So initially in 2020, we, uh, I and my partner started, uh, freelancing for many clients, um, like underwriting deals. We started to learn this by, uh, doing trainings and doing hands off jobs. And as we grew and as we started to get enough clients, like in 2021, um, it was something that I decided that it’s, it’s enough that, uh, we can’t grow more than this if we don’t hire people and we can hire people only by opening a company. And that’s what we did in 2021. We started hiring, we started, like, we incorporated a company here, uh, real well, and we started hiring people. We started training them as real estate in India is totally different than what we have in the United States. It’s very unsophisticated market over, over here in India. So there’s no, um, like specific, um, uh, education or related to real estate over here.
Abhi Jain (10:17):
So what we learned was ev everything was on, on our own, and we train all of our analysts, like we can hire so smart people, um, in India, they are such a quick, uh, they’re such a quick learner, and they are so quick to learn everything, and that’s what we saw, that we can train them, we can set up a process where we can, um, train everyone on how things can be done, how, and how to invite, how to build models if they’re good in Excel. So, uh, that’s when we started hiring, delegating things. And, uh, we are a team of 15 people now. And, uh, yeah. So, um,
Reed Goossens (10:56):
And, and, and you mentioned earlier, or I mentioned earlier, you cross a dot a lot of different asset classes. You’re not just multifamily mm-hmm.
Abhi Jain (11:11):
So, uh, we do, we have several asset classes. We have specialization for different asset classes with different, uh, analysts and with different managers. Uh, we do multifamily, senior living, uh, light tech deals, uh, mobile home park, uh, self storage, um, uh, offices, uh, retail, industrial, majority of the asset classes. I’ve worked on data centers. So, uh, there are a lot of asset classes that we have covered, and there are some smaller niche that are yet to be covered, like scientific research and all. But, uh, we are like trying to like, uh, get hands-on experience on that as well
Reed Goossens (11:49):
And, and give the, the listeners a bit of an understanding. You know, underwriting is not the sexiest thing, right? Mm-hmm.
Abhi Jain (12:28):
So like, uh, I would say if, you know, modeling, if you, if you are able to analyze a particular asset class or any particular industry, you’ll be able to analyze any other industry as well. It’s very simple. It’s again, like, uh, it’s just the cash flows that runs the business. So in, in the end, uh, net operating income is the thing that we have in real estate that always matters. Uh, whether it’s multi-family, whether it’s self-storage, whether it’s any other asset class. Other than that, uh, even I’ve, uh, I’ve seen like, uh, once I started learning and once I have, uh, enough experience in real estate, I’m able to analyze different asset classes, not asset classes, different industries as well. So not only realistic, I’m able to like, analyze different industries. Maybe it’s oil and gas or solar panels, or, uh, green electricity, so everything. So,
Reed Goossens (13:28):
And you bring, sorry, to interrupt. You bring up an interesting point because, you know, what we do at RSM Property Group is that we are a multi-family operator, right? And, and we are very good at, and, you know, to your point, cash flow modeling is just all about net operating income, right? You’ve gotta understand where, you know, your income, your expenses, the net operating income, the debt service, what’s the cash flow. But that’s when it comes a little tricky because, you know, they talk about doing 10,000 hours of, of underwriting, or 10,000 hours of becoming a, a, you know, a master of, of, of a, of, of a, you know, an art, you know, I know working with you personally that we are very, you know, real estate’s quite local and you gotta understand, you know, costs for payroll, costs for insurance, real estate taxes, you know, what is, you know, uh, con if you’re turning in, in multifamily, if you’re turning a unit when a tenant moves out, like what are those costs?
Reed Goossens (14:21):
Mm-hmm.
Abhi Jain (15:02):
Yep. That’s a really good question. So what we do is basically we have SOPs for every asset class built out. So, and
Reed Goossens (15:09):
SOPs just, just, just
Abhi Jain (15:11):
Procedures
Reed Goossens (15:12):
Send it. Thank you. Yeah.
Abhi Jain (15:14):
So we have SOPs built out for each asset class, um, like how everything should be analyzed and if, uh, this steam off according to the market or not. So let’s say if you are in New York, there are 24 $3,000 rent, then it’s a, a, a payroll of $2,000 per unit doesn’t seem really high, but if the average, uh, rent is only 1500, 1200 bucks per unit, then the, um, like if the personal cost or the payroll cost are $2,000 unit, then it’ll be much higher, like as compared to the market.
Reed Goossens (15:48):
So it’s a red flag. Yeah. If you, if you see that. Yeah. Yeah. Got it. Yeah, keep going.
Abhi Jain (15:53):
So similar to that, we have set up, uh, like, uh, standard operation operating procedures, uh, for each asset class based on our previous experience and underwriting many deals. Mm-hmm.
Reed Goossens (16:39):
Look, you know, as well as I do, you’ve underwritten a lot of deals, a lot across a lot of different industries that, you know, you get an om from a broker, whether it be a multi-family, self-storage mobile home park office, and it’s a little bit of BS sometimes, like it’s a bit roasted into glasses, right? They’ve got a P and L on there. I’ve always had the adage of chuck it out the window, like use it as maybe some light reading before you go to bed. But in general, you sort of gotta come up with your own set of numbers because you want to be conservative, right? Because the assumptions that you make on the growth on where you can push rents to where you can cut operating expenses, that matters, right? That, that drives the noi. So, um, how are you seeing that in today’s market as deals are sort of getting harder and harder to pencil? You know, particularly over the last couple of years, and now we’re coming into sort of a high interest rate environment. How are you seeing the game change in underwriting, and how much better do you have to do as it not as an operation with, with Realval, to make sure you aren’t giving advice to an investor who’s like mm-hmm.
Abhi Jain (17:42):
Yeah. Yeah. So what we do is basically, uh, we try different scenarios in today’s market, financing getting, uh, really cheap financed, uh, loan is very difficult. So, uh, people are trying to get deals with consumable loan, um, properties, which already have a very low interest rate and already have a lot high, uh, I IOP p left in the, uh, in that
Abhi Jain (18:46):
So what we see, uh, we see what expense assumption or any, uh, rent assumption has, has the broker, um, taken in the om and accordingly, how, uh, does, how is it different from our assumption and why is there a particular reason why they have taken that, let’s say r and m expense is very high in thet 12. So accordingly, they have taken a higher expense, but sometimes they don’t specify if the r and m includes the CapEx or not. And if the, if the OM says that these, uh, these r and m expenses include the CapEx part, then we like, uh, reduce it for now, but keep it as a question to be confirmed from the broker and things like that. Um, like insurance and taxes are usually the, uh, deal breaker in a deal. And that’s what the broker, um, came to have, let’s say, uh, say you that you should consult with your tax consultant or insurance consultant before, uh, like you should not believe the om numbers for tax and insurance. So that’s what we should do as well. We, for taxes, what we do is we call up counties, we, um, check when the reassessment would be of particular property, what the military exactly is, and if they have recessed the property in this year, uh, what are the updated numbers? So there are counties and, uh, states where the property is not visas right after sale. So, uh, what we do is we confirm them from the county, and, uh, only after that we assume the taxes.
Reed Goossens (20:20):
Yep. No, it, it’s, it’s interesting, right? It’s, it’s such a, you know, depending on how conservative or not conservative you wanna be, you, you can really make a, you know, essentially are you, it’s, it’s crass, but you know, you, you, you stand, stand around sort of, um, you know, salivating over a spreadsheet where it’s just numbers on a spreadsheet. Like, I can make a spreadsheet look at any way I want it to look to make the deal look pretty, right? And so, particularly in today’s world where you’ve got investors, you know, we’re coming into sort of turbulent times with, with the economy, you really gotta be careful with what your, your assumptions are. Um, one of the things, you know, as I, as I mentioned earlier to all those listeners, I work directly with Realval, you are my underwriters for, for RSM Property Group.
Reed Goossens (21:03):
But one of the things I’ve been encouraging you guys to do, and, and what I get, what I kind of geek out on is, is the data collection, right? You are across so many different, not only do you do underwriting for me, but you do it for a lot of other clients and a lot of other, uh, industries. So, you know, I know at least with our deals and our markets, I get you guys to track the data, track what we are underwriting, what deals are we underwriting, and how, how they performed or, or how did, where did they end up selling? So how much is data collection in your business, you know, on the backend important Yeah. To then make those assumptions that we talked about earlier, more concrete. So, well actually, that broker, we’ve underwritten 20 deals in Dallas, for example. We know that, you know, you know, the average 1980 building doesn’t operate at, you know, $2,000 a door. It operates more at four and a half thousand dollars a door, right? How, how much of that is really helping you drive the business and really creating value within the business, because I feel like that would be the biggest value creation for you guys as you’re starting out, um, a company like Realval.
Abhi Jain (22:03):
Yeah. So, uh, like we are doing for RSN property group, we are doing that internally as well. There are two, two sets of data that we have that we usually prepare is, um, like the deal that has come onto the market right now is maybe a deal that has been on market for the past six months and has been reintroduced in the market, which is happening nowadays, very, uh, like commonly. So I’m seeing properties that are coming out of the market, which were 10 million, uh, which were having a 10 million higher guidance six months back. Mm-hmm. So, so that, that’s happening. And this, that helps us, uh, analyze, um, like what pricing or what, um, um, how should we, should or should we even underwrite deals at guidance that the broker is saying. Right? And the other set of, um, data that we collect is the operate operating expense related.
Abhi Jain (23:00):
So like 1980 belt, 1990, uh, 1990s asset in Dallas. Um, we have unwritten, let’s say hundreds of properties in Dallas for, uh, 1990s bill. So we have data for all those, uh, properties, like what they are being operated at and average out everything we get. Uh, uh, an idea like, uh, what’s the payroll or in, in that particular area, what’s the, um, like the turnover expenses or insurance expenses in that
Reed Goossens (23:41):
No, no. And that, and that’s, that’s the beauty of working with a group like yourself. You know, um, I, I, I, I really encourage that data collection. I’ve always encouraged data collection, um, to, to really make sure that I as an operator are making the best decisions. Um, how many people come to you Abhi with their own model? And how many people do you serve with your own? Like you build a model from, from scratch? Yeah.
Abhi Jain (24:06):
So majority of our clients you own, really, they don’t have any underwriting experience. Um mm-hmm. They don’t have any, uh, models they use, uh, micro blanks, model
Reed Goossens (24:28):
He’s very, he might wanna listen to this cause he needs to, he needs to fix it,
Abhi Jain (24:33):
So, uh, like our model, we have built model, we have continuously updated a model, which can be, uh, used with, uh, it’s first of all very detailed and institutional level model. And what we do is we prepare different models for each industries for development acquisition, and use that for whoever, which, like, uh, if the client needs the model, and if they don’t have any model as such. So we have taken inspiration from a lot of our clients. A lot of our clients have their own models mm-hmm.
Reed Goossens (25:52):
For those of you who are interested in staying up to date with all the latest happenings in my business, or to learn more about passively investing directly into my multi-family value add deals, then head over to reedgoossen.com And sign up for my monthly newsletter. By signing up, you’ll automatically be notified about my new up and coming investment opportunities. You’ll be able to stay up to date with all the latest real estate news here in the United States and much, much more. So head over to reedgoossen.com and sign up today. Now, back into the show.
Reed Goossens (26:27):
I want come back to Rev IQ in a second, but I do want to have a bit of a story time here. And it’s, it’s important for me to, to state this because the first, and this is for everyone out there listening about how to get started in underwriting, I, I personally have been, I’m, I’m quite handy with the spreadsheet, and I built, I remember building my first cash flow model back in the day. It was, you know, from my triplex that I bought back in 2012. It was very rudimentary. Um, but over the years I’ve actually used virtual assistance, right? And, and, and the story of where, how Abhi and I got together was ever since 2013, I remember the first person I ever hired, quote unquote, hired as a virtual assistant, was actually two kids from usc. And I taught them how to underwrite some deals, right?
Reed Goossens (27:08):
Very basic deals. And what I found was that back, my old model back in the day was, it was, it was okay, but it wasn’t great. And I fe, I fe spent a lot of my time teaching these young kids to underwrite in order to, you know, save me time, underwriting deals. You know, over the years, I had then found that I started hiring younger kids who come outta uni are in sort of their first or second year at a, at a, a big shop. They’re not earning a ton of money, but they wanted a bit of site income. And so I’d hire these, you know, guys, 10, 15 hours a week. But what I, what that did was help me then create better models because I could then ask them to say, Hey, how do you compare your model at your work to what this model is?
Reed Goossens (27:52):
And over a period of many iterations, like I’m talking mo like mo more than 50 iterations, we’ve got to a model, which, which I have today. And I I’m saying this more as a story for the, for the listeners because what I ended up building was, as, as analysts came in and outta my business with RSN, they would only sort of stick around for six months and I would have to then go again and find another one on Upwork. And okay, you know, this is how I do. And I actually end up building a bunch of videos of like, this is how you should up upload a rent roll. This is how you up should upload a T 12. This is how I like to look at it. And it wasn’t until I stumbled across Abhi and, and aj and, and historically I was very hell bent on using us, uh, talent, right?
Reed Goossens (28:34):
Because I was like, I need to have US talent who’ve gone to un US universities and understand us real estate. Cut along story short, I stumbled across Abhi and, and,, and your partner, um, at RealVal and I had built these videos and we sort of nearly like worked together and you sh you learnt like I learnt. And now today, Abhi and his team are actually making even more corrections to my model, which is incredible and making it even more refined. Um, and I just sort of say that because I have been close to the veil and close to the, the, the coalface, so to speak, in building models and trying to build out a do do it for yourself underwriting service. Cause my idea, and I, I dunno if I’ve ever shared this with you, ABI was a couple years back, probably 2016, I, I, I tried to launch with another syndicate friend of mine, oh, Omar Khan, a thing called, um, deal Analytica and Deal Analytica was going to be like a red iq, but there was sort of these two worlds, right?
Reed Goossens (29:34):
There was, you could have, um, my idea was how can you have an underwriter for a fraction of the cost without, you know, if you are in that sort of, you’re just getting started, you’re a syndicated, you’re not a big shop that can, that can afford to have a full-time underwriter who sits at a, you know, in the dungeon and pumps out models. But you wanted something that was a little bit more, you know, 10 99, you know, freelance work, but it was more of a package, like you come through a process, this is how you upload the, the T12, this is how you upload the rent roll and we’re gonna produce you a, you know, a, a, a package at the end of it. But it was actually run by actual people and not a software. Because I found out software like Red iq, it only goes so far, right?
Reed Goossens (30:18):
And the software at Red IQ is, it’s still very, the person who uses it has to still e enter all the data. Where I saw a real need, which is what you’ve created Arbi, and I’m coming around to my story now cause I’m ranting a little bit. But it comes back to you’ve created a business around, uh, a, a a done for you underwriting service from soup to nuts for those people who can’t necessarily afford to have the full-time underwriter sitting in their office, but they need, they know, they need underwriting services and capabilities. And that’s what I’ve always wanted to build myself, but I’ve never had the time or the energy because I’ve been building my company RSN. But it was, when I stumbled upon you, you two, it was sort of like we, we instantly clicked because I’d already had this thought of doing this thing, but I never had the time where you guys were like, I see a value in the industry, and now we’ve kind of worked together to, I, I, I hope, you know, make each other better.
Reed Goossens (31:14):
But, but, but, but the, but the idea is it was very kik and coming together, but that, that the industry really needed that, that that hole to be plugged there was go hire a person for 70 or $80,000 a year, sit in your sw in, in your, in your office, there’s red iq, but then there’s nothing else, right? But there’s a lot of people in that lower tier that want to, that, that want professional institutional underwriting, but don’t have the time and the energy to go do it. And this is, I, you know why I want to get you on the show and I’ll, I’ll shut up now, but I just wanted to bring that as a story for all the listeners and I’ll let you comment on that, Abhi, because I think it’s important to bring these services to the industry as people are getting involved, because you can make bad decisions if you don’t know how to underwrite. I’ll, I’ll, I’ll let you comment.
Abhi Jain (32:00):
Yeah, of course. So like, one thing that I’d like to add is, uh, as everyone usually, uh, at a particular level, um, knows that time is most valuable, their time is most valuable, and rather than underwriting deals or doing repetitive tasks that are, uh, like fine, uh, like signing for ca signing, cas heading, deal room access, uh, contacting broker for the pricing and all of, so these kind of things are rep, these kind of repetitive things is something that takes a lot of time. Uh, and then the writing can take from two hours to four hours a day. And if, if you’re on writing two deals a day, it’ll take your whole day. So they, they, they’ll not, they’ll not be able to like connect with other investors, uh, uh, uh, brokers and make broker connections. So broker connections nowadays are very important because like thousand people are running behind the 10, they’re fighting for 10 days.
Abhi Jain (32:58):
So having really nice program connection in the area that you’re targeting are very, are really important. And so, like, uh, they can, uh, send you deals pre-market, and we have seen with a lot of clients that they have closed on pre-market deals rather than before coming onto the market. So that, that’s really helpful. And, uh, a couple of clients are having difficulties raising investment as well. So that’s also because they don’t have time to, uh, connect with different investors, uh, uh, develop their network. But I also suggested them to maybe start podcast going, start going on post podcast of different people so they, they’ll know different, uh, investors. What they’re doing is they’re doing the property management on their own right now. So that takes a huge, a lot, huge lot of time for, and they don’t, um, get time to connect with different people. So that’s one thing that I think every, every real estate investor should consider, um, is investing their time and more, um, like value adding things rather than doing repetitive tasks that anyone else can do for you
Reed Goossens (34:15):
Or, or it’s, it’s a task that you’re not good at, right? There’s a lot of people out there who love the business of real estate. They love going out and connecting with people. They love finding deals, but they don’t, they just don’t have, they don’t know what, how to work an Excel spreadsheet, right? So yeah, you are gonna be dead in the water if you don’t have a, uh, you know, someone on your team that can fill that gap, you can go out and hire someone full-time. Or there’s, there’s groups out there like, like RealVal, um, which I’m, you know, very proud to say that I was there at the beginning. And, you know, we’ve fostered a relationship together and, and, and I, I, I, you know, I expect to work with you guys for many years to come, and I can see, you know, how the growth that you got because of the way you apply yourself to your SOPs, to your, uh, details, uh, to quality control, to making sure you’re capturing that data, to making us as the syndicator nearly like the engine behind the car operate most efficiently.
Reed Goossens (35:09):
And, and understanding where my time is best spent. And I’ve, I understood that many years ago when I first hired those kids from usc that me underwriting three or four hours a day was an absolute waste of my time, particularly when I was trying to work a full-time job and have a, have a life and have my girlfriend and all that sort of stuff. But I knew early on that I was half decent in underwriting, but I could be, I could make it better by outsourcing to people who are smarter than me. And you know, here we are seven, eight years later, talking to you on this podcast about the evolution of all of this industry, you know, and there’s so many fascinating things that I’ve seen and witnessed over the years. Another awesome one around technology is, you know, the online deal rooms, you know, the, the, the online portals.
Reed Goossens (35:54):
Like I remember back in the day when it was just all DocuSign and you kept it on a, you know, a g drive, right? Today everyone’s got, you know, Juniper Square and deal investor deal room and you know, cash flow portal. And it, it’s just, it’s the, the industry has evolved and so has the servicing behind that at this industry in commercial real estate. And, and, and I think it’s only something that’s, that’s good for the business, right? It’s good for, it’s good for you guys, it’s good for us. Um, so yeah, I I just really appreciate the, the, the, the working relationship we have.
Abhi Jain (36:24):
Yeah. What we do is a, as a quality control is another thing. We have like managers, uh, allocated to different analysts. So every manager has a couple of analysts under them. So who, whichever analyst is directly connected to the client, they don’t directly send the deals, uh, to the client unless, uh, they are very experienced and the client is comfortable. So once we are onboarding a particular client, what we do is we allocate the manager as well as the analyst. So that manager has a lot, a lot of experience, and they’ll, if they’re able to understand the client’s process or if they don’t have a process, they’ll be able to develop a process as they have been seeing different processes of many, many investors. Yeah. So they’ll develop a process as per their requirements and as per their needs so that it can help them out in future and, uh, review all the work, all the deals that, uh, analyst is doing. So it always comes to the investor as a one step check, and once they’re comfortable enough in a couple of months or so, they, uh, start to go more on the back end and have the analyst let go or get go.
Reed Goossens (37:32):
Yeah, no, it’s, it’s an, it’s a great system. I think it’s, yeah, just to reiterate for those people, um, who listening is just like, so the team has managers within the organization that are interfacing with the client, and then those managers supported by junior analysts who help pump out the, you know, the multiple iterations of, of the different deals and the different models, uh, to then come back to, to, to the client like me. And, and, and I’ve been, you know, fortunate enough to, to see that firsthand, and it’s been quite successful in terms of turning around product really quickly. So, um, ABI then the, the last question before we get into the lightning round is, where do you see the company going? What’s the sort of vision of the next five years?
Abhi Jain (38:11):
So, uh, I all actually created a vision with my partners, uh, like last month, uh, for the next three years. So what we are planning is to, like, currently we are 15 people, and, uh, in 2023, we are planning to expand really quickly, even though the market is down, we know, and, uh, in since, uh, the market is, uh, expected to go up in June 20, 23 or so. And what we are planning is we are redeveloping everything. We are de redeveloping our process, and, uh, we are planning to, uh, maybe expand our company by three times, by the next year, by year. Wow. Uh, 20. That’s awesome.
Reed Goossens (38:51):
Look out Realval, uh, look out, uh, red IQ and bullpen because, uh, RealVal’s coming for you. I know, I, I, and I’m, you know, awesome to, to be along as a client for the ride. So I think it’s, uh, it’s incredible and, and as I grow as a client as well, I know I’m asking you guys for certain stuff and you’re taking it away, processing it, and coming back to me with ideas of how to, you know, capture that extra bit of data or, you know, um, you know, one thing we’ve talked about at a long, at a long extent is that the, the access to CoStar, right? It costs a lot, but you guys are at the forefront of underwriting so many deals already. Maybe there’s your own mini CoStar within your own system. So it’s just, it’s, uh, it’s incredible to see you grow, and I just wish you all the best. Um, but at the end of every show, I do like to dive into the top five investing tips. You ready to get into it? Yep. Mate, question number one is, what is the daily habit you practice to keep on track towards your goals?
Abhi Jain (39:45):
One thing is, um, like I really like work, workout and working out. So I, even if there’s, um, loads of, uh, I don’t miss my workouts. And, uh, so that’s one thing that keep my mind clear, and that’s something that I would recommend everyone do. So
Reed Goossens (40:04):
What do, what do you, what’s your, what, what sort of work are you running? You’re gonna to the gym, you on yoga, what are you doing?
Abhi Jain (40:08):
I’m going to the gym.
Reed Goossens (40:09):
Yeah. Very nice. Yeah, I, I, I, I’m a hundred percent the same way with you. If I don’t do something physical in the day, going to the gym, going for a run, going for a surf, I get a little stir crazy. My wife gets annoyed with me and she says, get outta the house and go, go run around, go run around the block.
Abhi Jain (40:30):
Uh, to be honest, uh, you
Reed Goossens (40:32):
Really, no, that’s no way. Come on. Who else?
Abhi Jain (40:40):
Actually, I’ve seen you like, uh, from starting RSN from Zero, and I’ve seen you close deals, uh, like four deal, two deal portfolio twice in this year. And I’ve seen you, I’ve, I’ve seen your mind mindset. I’ve, uh, listened to a lot of your podcasts and, uh, like I also like talk about you, uh, with
Reed Goossens (41:13):
Well, I’m very humbled. Thank you. I did, I just, for the listeners, I, it’s not a, I didn’t, I didn’t set abhi up just to say that, so to thank you my friend. I, I, I, I, thank you. Thank you. That’s all I can say. Um, question number three is, what’s the most influential tool in your business? Now, when I say tool, it could be a physical tool, like a notepad or a, or a phone, or it could be a piece of software that you just can’t run the business without. What is it?
Abhi Jain (41:38):
It’s actually Microsoft Excel that, uh, yeah. Yeah. So that’s something is, is a base for everything that we do. And, uh, without Microsoft Excel, it won’t be possible to build models, it won’t be possible to build underwritings and do all the, all analysis that we do right now,
Reed Goossens (41:55):
Right? No, it’s, it’s that in Zoom, probably, right? Because you guys are in India. Yeah. And, and yeah, we’re, we’re halfway across the globe. So yeah. I, I, I completely agree. Excel, it’s, it’s, it’s come up a few times in this question over the years.
Abhi Jain (42:24):
Um, actually I have failed a lot during my, um, studies initially. And I’ve learned that discipline is a very, um, like, important thing. And if you don’t have discipline to do a particular thing, um, you won’t be able to succeed. And failures are something that I’ve learned a lot from, and I’ve failed a couple of times, uh, during my education. And I, I’ve always learned new things from that. And, um, I’ve always applied those things in my future as well. One thing, one, uh, another thing that I have seen is no, no, uh, amount of work is small or big. Mm-hmm. Even I’ve done, uh, smaller things in the past, those are coming to use, uh, coming for me to use now. So I used to work for a company, um, that where I used to build just charts, charts and charts, uh, every day for a couple of months.
Abhi Jain (43:25):
And I was so bored. But those, those kind of skills are coming, um, to me now, and like, so that I can help, uh, my clients build decks and, uh, prepare different charts. And so, so everything is, um, coming back to me now and every, uh, dot connects at the end. That’s what I’ve seen. So, um, if you look at the past and see, uh, everything, everything is, uh, connected. And if I wasn’t able to do that particular thing, let’s say if I, um, our company, our freelancing firm and everything was born in Covid, uh, right after I, uh, graduated, right after I completed my charter permanency, uh, last I see is if I wouldn’t have failed my last attempt, I wouldn’t have wasted my six months. I would’ve completed it, uh, six months earlier than Covid. And I would have been doing something different now rather than, uh, freelancing. So everything, uh, like when I look into the past, I see every.to beconnected.
Reed Goossens (44:36):
It is, it’s so, it’s, it’s very interesting. And it’s, um, you, you’re right. And, and I’ve got a similar story, and I won’t bore you with it, but it’s, it’s sort of like those pain you mentioned creating charts, it’s like a pain, right? You look back and you, you quit, you, you, you shiver because you’d like, I don’t want ever wanna see a freaking chart again. But now it’s a skill set that you’ve picked up that’s helped pro, you know, provided some of the fundamentals of what the business is, the business service that you’re providing today. And looking back, you also, for those people are listening. If you are a job that you fricking hate, try and see what skillset you can take from it that are gonna help you be the, the, the better entrepreneur in the future. But it’s also gonna be something that’s a pain point that’s gonna force you to become an entrepreneur, right? Because it’s what you’re saying is that you had a pain point then and it forced you to do something else and pivot and create a company, which ultimately, here, here we are today. So it’s awesome stuff. Yeah. Um, last question for you mate, is where can people reach you to continue the conversation that will be in your sphere? Where do they go?
Abhi Jain (45:35):
So, um, everyone can reach out to me on LinkedIn or email me or, uh, we are always available on our website as well. So you can ping us on our website and
Reed Goossens (45:47):
Which is just remind, remind the listeners what it is.
Abhi Jain (45:49):
It’s www.therealval.com, Therealval.com. So you can reach out to us with that. And, uh, or my LinkedIn as well.
Reed Goossens (46:03):
Abhi Abhi Jain, so it’s Abhi Jain and it’s www.therealvalval.com. Yep. Awesome stuff, my friend. I want to thank you so much for jumping on the show today. I just want to, you know, reflect some of the things that I took away. Look, I think you have, just knowing you from, from the beginning, you have an ability to, you’re curious about stuff, uh, and you get
Reed Goossens (46:57):
Those are the things that I wanna see as a client in a, in a business owner as a ceo, particularly around underwriting, because I iron sharpens iron, right? We want to constantly get better. We wanna constantly improve on what we do. Underwriting can be complicated, but also can be very, very basic. And I know that you and I have had many long conversations about complex models, but then we’ve had to break it down to, okay, what are we picking it up for? What are we trying to sell it for? Do we believe in that? Yes or no,
Abhi Jain (47:52):
Um, uh, the thing that, um, I’ve seen people struggle, um, is like, Excel is very, it can be really complex if you don’t know if enough if you’re not worked on it. And it can be really easy if you, if you are already working on it and your hands-on experience, but everything is not really good at everything. So, um, you should, um, like by growing our company, like while growing our company, I was not really delegating stuff myself initially, and that’s what something hit me. Like I’m asking people to delegate their things to us while I’m not doing that, uh, for my own company. Mm-hmm.
Reed Goossens (48:55):
You started going at a bit, at a faster pace.
Abhi Jain (48:58):
Yes.
Reed Goossens (48:59):
Yeah. Awesome stuff, man. Well, look, thank you again for jumping on the show. Enjoy the rest of your week and we’ll catch up very, very soon.
Abhi Jain (49:07):
Thank you so much. Sweet.
Reed Goossens (49:08):
Well, there you have it. Another episode, jam-packed full of incredible advice from Abhi Abhi and his team over@therealval.com. Remember to go and check him out. If you are someone who is getting into the business of syndication in whatever capacity, you know, multi-family, self-storage, Volvo Home Parks, the team over at RealVal, um, are, do have a, a big smorgasboard of capabilities to underwrite a lot of different asset classes and a lot of different industries. So if you are, if you’re missing that within a business, I highly, highly, highly recommend you get over and see them. They are, they’re a reasonably priced and it takes a lot off your plate and a lot of stress off your plate, um, as a, you know, a leader of a syndication company, cuz you can’t be always focused on underwriting. I know for myself, I couldn’t be focused on underwriting and needed to outsource that early on in my business, and I did so right.
Reed Goossens (49:54):
And having the right team around you at a reasonable price helps us all grow together. So definitely go check out therealval.com. Again, I wanna thank everyone to, for taking some time outta their day to continue to grow their financial iq because that’s what we’re all about here on this show. If you do like this show, the easiest way to give back is to give it a five star review on iTunes. All the links from today’s show will be up on my pod, my podcast, my website called reedgoossens.com. Check it out over there and you can follow me on Instagram, LinkedIn, and Facebook. Just type in the word read goons and we’re gonna do this all again next week. So remember, be bold, be brave, and go give life a crack.