Coffeez with Joe Shalaby - Real Estate Excellence ft. Visionary Robert Pereira | Coffeez for Closers with Joe Shalaby Ep. 51

Episode Date: November 6, 2024

Robert Pereira, the visionary founder of ARC Realty, has built a reputation for transforming the real estate industry with his strategic insights and relentless drive. Known for his forward-thinking approach, Robert has spearheaded numerous high-value deals, establishing ARC Realty as a powerhouse in the sector. His dedication to client satisfaction and innovative market strategies have resulted in exceptional growth and profitability. With a keen eye for emerging trends, Robert continuously adapts, keeping ARC Realty at the forefront of real estate development. Under his leadership, the company has consistently outperformed competitors, contributing to his impressive personal success. His expertise and commitment have earned him recognition as one of the industry’s leading figures. Robert’s journey is a testament to his financial acumen, making him a true inspiration for aspiring entrepreneurs and seasoned professionals alike.For More Check Out our Playlist: https://music.youtube.com/playlist?list=PLgPwyhl8CkXiM0cBtuY8A_6JS60FueLz3&si=0_2dnoPkYV6jcSGw Check Us Out on all Platforms!Apple: https://podcasts.apple.com/us/podcast/coffeez-for-closers-with-joe-shalaby/id1726674707Spotify: https://open.spotify.com/show/2KkQWRqHSHcCK3TVfsRKUK?si=hjTnUOjFS5eTDxBjgf4RwQ&preview=noneAmazon: https://www.amazon.com/Coffeez-Closers-Joe-Shalaby/dp/B0CRYLQRW6 Coffeez and Closers Socials & WebsiteWebsite: https://coffeezforclosers.com/Instagram: https://www.instagram.com/coffeezforclosers/TikTok: https://www.youtube.com/redirect?event=video_description&redir_token=QUFFLUhqbnU0T3RrLXdPbC1BR2NLc2lWcExqWklQaHlQUXxBQ3Jtc0tudi1GV2Zod3hRYzRhTkhONFBuMlptblNGSlJ1QzhpV0tzbHh5YThNR0R3Y2RnNnU5NV9ER3E5ZUhxMjdUUWp1UWo4MVl6Q2szeXo1cFh1OHNkYkxDR1F0MXZtMTZ6QnZoakdzSnJpVl9PcWZBOU9zZw&q=https%3A%2F%2Fwww.tiktok.com%2F%40coffeezforclosers&v=uXvk6LY9lS8Facebook: https://www.youtube.com/redirect?event=video_description&redir_token=QUFFLUhqa2pLZ2pMaUxmSTh4dy1qazMtdlBjX2pVN1AxQXxBQ3Jtc0tua2RUTUNsRmJob0RKWlVqeDhNaUN4US1rdlRvUG9Fdm5SNk1jU1pQNzNLQnVmUmtGMGtMYUViZ2pLMXJkOVJUci1kMk9DN2poTThVV2NFd0tISWdDMzNwOEZ2c3pVb09lbEhjemJHblRsS1RKdHZqbw&q=https%3A%2F%2Fwww.facebook.com%2Fpeople%2FCoffeez-for-Closers-with-Joe-Shalaby%2F61556355642488%2F&v=uXvk6LY9lS8 Joe Shalaby SocialsInstagram: https://www.instagram.com/josephshalaby/TikTok: https://www.youtube.com/redirect?event=video_description&redir_token=QUFFLUhqa3p6VlRzR1BWMkJQM1ZIaUdVZHhYVTYyak43QXxBQ3Jtc0tuUXVBOE1oZUJYTmZIZnNENUgxQkhjamk4RXJHb09MWU9OczJhLWpnX0JwN2pENzRhaV9NajJROW5nek1tQ1VvVE40ZFJuUUI2cnI0ajNKLXE4d1VMUUpkTGFHR0tGY0o5NUhnWnZnaXJoZXdEM0piaw&q=https%3A%2F%2Fwww.tiktok.com%2F%40josephshalaby&v=uXvk6LY9lS8Facebook: https://www.facebook.com/josephshalaby E Mortgage Capital Socials & WebsiteInstagram: https://www.instagram.com/emortgagecapital/Website: https://www.emortgagecapital.com/Twitter: https://twitter.com/Emortgagecap #1 Mortgage Company on Social on 🌎#1 Non Delegated Lender in the Country🌟#1 Broker in CANMLS #1416824"Mortgages Are What We Do Not Who We Are"™https://finance.yahoo.com/news/learn-why-e-mortgage-capital-192000740.htmlAdvertising Inquiries: https://redcircle.com/brandsPrivacy & Opt-Out: https://redcircle.com/privacy

What's up, everybody. Welcome to another episode of Coffee's Proposers. Today, we're diving into the story of a real estate powerhouse who's revolutionized the multifamily sector with over 250 residential projects under his belt right now and over $170 million in capital raised. His journey is a testament to strategic vision and relentless execution. His expertise has driven the acquisition of major properties across the Southeast, making his company a key player in the industry. He also has the investors like Alex Hermose, Charon Srivatsa, all invested in his platform. Stay tuned as we reveal the mastermind behind ARC multifamily group, the one, the only, founder and CEO of ARC, Mr. Robert Perre. Thanks a lot, Joe. Thanks for joining the show today. Absolutely. My pleasure.

We're live now with the live studio audience across all platforms. right now. I appreciate you coming down here. I appreciate what you're doing. I appreciate the platform that you've created for investors across the U.S. You've got some of the key players on the planet, I think, who are invested in ARC. And that's a testament to their trust in what you're doing, what you've built, and, you know, all around the character that you are. Thank you. No, it's been a fun journey, and I always say we're just warming out. Yeah, exactly. I love that. I love that. What I like to start the show out with is a traditional question I ask every single guest on the show. And is, how does Robert Pereira start his morning? What is your morning routine? Great question. Well, I am an early riser. I've got a team that's based in the southeast. And so they start their day, you know, we're here in California, three hours behind them. And they start their day at West Coast time around probably 4 o'clock.

So I'm up not too long after that. I'll check in with the team, find out what opportunities, what's happened the previous day and what opportunities exist for this day that I need to be involved with and then go about getting my work going to work on the bigger vision for our company, Ark Multifamily. And then I, you know, I'm an active dad. So I like to be, if I'm in the office early, I'll come back, want to be with the kids for some time before they head off to school, and they're usually out

by 8 o'clock. And then after that, I go to the gym, get a workout in, and then it's a full day of work. Love it, man. Yeah, Southeast, you're grinding really early, way before the crack of dawn. Absolutely. So how did you get started in the multifamily space? Great question. So it's been, I've been in real estate investing now for 16 years. So I like to say I'm an old dog at this point, because I've seen a lot. I started, I'll take it back even further, and I'll give you the abridged version, but I moved here from Canada in 2002, born and raised a Canadian. I was an engineer that moved out here to Southern California to work for Broadcom.

And I was an engineer for Broadcom for several years. While at Broadcom, I went to UC Irvine for business school and came out in 2008 with a focus in real estate and finance, there were no jobs in real estate and finance because we were in the crash. And so with a couple of good friends started a company where we would renovate and sell foreclosed homes, did a lot of that for about a dozen years, built our investor base from a few hundred thousand dollars when it was just us pulling money to a little bit under 20 million. And then in 2019, you know, you and I had met just around that time and I was invested in heavily in luxury properties at the time in and around Newport and coastal Los Angeles.

Loved what we were doing, but there was a lot of stress. I got Gray Harris from having, you know, a lot of debt on our books without cash flow. And we had a lot of success in the space, but I wanted to do something that was more scalable. I had more investors than I could responsibly deploy capital with. And so there was, it was one of those things where I, you know, working with Shirvan Shuron Trivata, who has started as a mentor and business consultant to me and then has become my partner. We decided to shift into multifamily and started ARC in 2020, focused in the Southeast, bought our first complex in 2020, and have grown from that $20 million investor base to a little bit over $100 million now,

2,000 units that we own and operate, and we've got another almost 500 in our development, pipeline right now. So it's been a great ride. We've built a great company. We've got about 60 employees that are between our Irvine and our Atlanta office and all of our on-site teams. Very hands-on. We live and breathe value add multifamily all day long. You managed to build a company with $170 million on the books under management in four years, basically four and a half years? Absolutely. So the, The 170 is what I've raised cumulatively over the years. 100 is what we currently have deployed.

Our current portfolio of properties has a value of roughly 350 million. We've got another 100 million in our development pipeline that we're going to build. We're actually building units now with a couple of partners that are based in the southeast in Atlanta. So we're building another 457 units between now and end of 2025, which will take the current portfolio to about 450 million. And it's just, it's a rent cycle repeat. We look for deals that have below market rents and some deferred maintenance. We buy them, go in. We buy them with where we syndicate the capital.

So we're pooling investor capital to buy them. We have over 220 investors, including yourself. And what we do is we go in day one. We're improving the property, improving the experience for the tenants. I always say at ARC, I serve three people in servant leadership. I serve our tenants, make sure they're having. having a great experience at our assets, serve the onsite and corporate teams to make sure that they're empowered to do what they need to do. And then thirdly, but not least importantly, is our

investors. If I take care of our tenants and I take care of our teams, the investors will be happy. And we've done a pretty good job with that. You know, I was going to ask you, and you could just add to this, you know, you've managed to bring in some big brands to invest with you. Me, Sharon Srivasa, who's obviously your chairman, Alex Ramose, what is the secret sauce for you to really draw in such great, talented people to the Ark multifamily? Honestly, we've just been blessed to have good organic relationships. You know, we've got a lot of my investors happen to come from Broadcom where I've worked.

So I've got people who have millions of dollars with us that have been with me for a decade or more. And, you know, candidly, it's all based on substance and authenticity and just doing what. what we said we're going to do, reporting religiously to the investors to make sure that they're fully informed of how things are going at the assets, and making sure that we under promise and over deliver. And we set realistic goals. When I'm talking to a prospective investor, be the big or small, the question is, hey, if they ask me, hey, can you hit a, can you double my money in 12 months? I said, well, you know, probably not, right? Well, I do shoot to double your money in five years between cash flow and equity growth, that's a attainable goal. If we hit it sooner, great, but I don't plan

for that. Sometimes, you know, you might get a unicorn once in a while. Our first project that we bought in 2020 hit a 60% return to investors in 15 months. But that was in on that project. Yes, but that was early COVID and it was a great buy. And then because of a lot of money that had flooded the economy at the time, there was a lot of cap rate compression. So assets went up like crazy. between 2020 and 2022, which resulted in that. But in general, all the other assets that we own, we have nine properties currently across 2,000 units, and they're all modeling very well to hit that two-ext return in five years.

Now, what is it that drew you to states like Georgia, states like Alabama? Why are you going to the southeast? Great question. Affordability. We live in Southern California in coastal Orange County, right? So even if you go past, you know, we're both, in Newport Beach, but even if you go to a city like Irvine, phenomenal location, you know,

but when you look at the price to rent ratio, it's just not nearly as attractive because of how expensive the real estate is here. The most recent complex that you're invested in with me that we bought, called the Preston. It's in suburban Atlanta, 2003 build. It would fit very well in Orange County as far as the look and feel of the asset. The difference is we bought, it was 334 units. We bought it for 52 million dollars, 156,000 per unit. We're going to add about $12,000 dollars of improvements to each unit in the time we own it. So let's call it all in it just under 170 as per door. We're getting rents pro forma at 1700. So you're getting about a 1% ratio. You know,700 divided by 170,000, it's about 1%. It's a very healthy ratio. You know you've got a winner when you've

got something like that or something close to that 1% mark. By comparison, if I was to buy that same in Irvine, you know, if I was getting $1,700 a month in rent, I probably would be paying at least twice the price. So, you know, California is a great market, but it is more based on speculation that there's going to be continued hyper growth in rents than pure fundamentals. It allows you to gain an appreciation as an investor. You can get, you know, equity growth through appreciation, but the actual cash flow, I want to be able to return to investors very quickly. Within six months of buying, I want to start distributing quarterly to investors, so they're getting cash flow from operations. And I can't as easily do that in California. So that's why we picked the Southeast.

Nice. Now, what year did you start your entrepreneurial journey? We started in, oh, I started in 2008, you know, right out of the great financial crisis. We, I graduated from Mirage, which is UC Irvine's Business School. And we started my, my partners and I started flipping homes in Moreno Valley. We were buying homes that had previously sold, to give you an idea of how bad it was. You're a little bit younger than me, but you were probably in the game at that time already.

We were buying homes for about $80,000 a door that had previously sold for $4,500,000, 24 to 36 months earlier. Wow. So it was a real mess that had been created at the time. We were part of the cleanup in a small way, but it got us, And we've always, I've always wanted to have a backup plan on whatever I own.

Do I have what we called hold economics? With those properties, we could have cash flowed them and rented them. We ended up, excuse me, we ended up selling all of them along the way. Some we sold too early. We probably should have held more because they would have gone, they did go up tremendously. But we would always make sure we had margin to make sure our investors could get yield from day one. We had a lot of quick turns where we would buy, fix, and sell within six months. and as we got further and further into the game,

we got into bigger projects. Right now, you and I are co-invested on a property that we bought the lot for $3.6 million, built a brand new luxury home on it, and one of our partners who's also the realtor on it is working with buyers right now in the $11 million range. So it's great. There's great margins on those, but it's not for everyone.

What we do at ARC is, I think, more for everyone in that it's got a great hold economics and it's got cash flow nearly day one with the stuff that we do sometimes, you know, in the luxury property is super risky. Absolutely. It's not going to rent. You've got to sell it. And so we happen to be in a great market right now. So we're going to kill it on this one. But it's not for the fate of heart. Yeah, absolutely. And what's the minimum buy-in to ARC? We do. Our minimum is $100,000. And so we, you know, we've just kept it that number because it's worked well. But, you know, and we only work with accredited investors, accredited meaning they've got to have a net worth of over a million dollars or in their last two years income of $200,000 if they're single, 300,000 if they're married.

But, you know, we've got investors that have 100,000 with us and, you know, investors that have several million with us. That's awesome. You know, you've really delivered for every investor that I've seen. You've never let us down. Thank you. It's integral in our portfolio. leveraging ARC's, you know, entire platform and all the education and all the stuff that we do with the luxury as well.

I appreciate you. Under the ARC umbrella. Yeah. Now, you started ARC in 2019. What put, and then the small stuff is what put you in a financial position to start doing the luxury. Yes. It's all kind of stacked on itself. We won well on these $100,000 homes that became, then we got into $500,000 homes.

We got into our first million dollar home, you know, 10 years ago, and then it kind of just grew from there. And then once we were in luxury, when I started ARC, the investors that were with us realized that they could go from getting returns that were in the high single digits, low double digits, to at ARC, were shooting for 16 to 20 percent annualized returns with cash flow along the way. So all of those investors that were with us in my previous company, they came in and said, hey, we'll write much bigger checks to come into multifamily because they knew it was safer.

Yeah. And it's getting more, I feel like multifamily in the Southeast is by far the safest investment you can make in the country right now. Yeah, good population growth. You've got good job growth. There's not a lot not to like. And we're careful in what we buy. My team is actually very property management focused.

You know, I took a different approach when building ARC than other small operators and that they worked from the position of, okay, let's analyze deals. let's kind of work with a really a skeleton team, rely on third party help. I hired people before we even bought our first asset because I wanted to be in a position where we were getting expert advice from people on the ground. All of my assets have on-site teams, but my corporate team is all within a two-hour radius of all of our assets. So we can get out there, and we do get out there multiple times a week at each asset

to make sure we're driving the business plan, making sure that we're handling any issues along the way, but also creating great culture day one. I love that. Now, recognizing your work ethic, it's just like you outgrind everybody and you're always on, right? Except you. You have like a resilience about you. Where do you think that that grit mindset was established? Was it heritage?

Good question. A birthright. I think it's the same for you. I think it's the immigrant mindset. Honestly, it's one of those things where I don't take anything for granted. I tell people I have the immigrant mindset and then they find out I'm from Canada. My family's from India, right? So my mom and dad were immigrants to Canada.

They really grinded and built some. You weren't born in India? No, I wasn't. I was born in Toronto. No, but I'm an immigrant. No, but I'm an immigrant to the U.S., right? And honestly, it was one of those things. I came here 21 years ago.

I know, I know. It's, you know, you still have that immigrant mindset from your parents. Totally. Well, it's more than that. Like, when I moved here, right? My parents were already really well established in Toronto. So when I moved here, I love the fact that, you know, I felt like I wasn't under, like I had nobody sort of to watch over and make sure that I had to take the safe approach.

It was like, hey, I'm on my own, right? And my parents actually live out here now, but for the longest time, I was out here on my own. And it really helped to feel like I had nothing holding me back. I never worried about failing. I've been very careful as an investor, but I wasn't worried about getting embarrassed or embarrassing family because of, the fact that, you know, something didn't go right or exactly as planned. So I think that's what allowed me to dream a little bit bigger and then work really hard to make it happen. So like, you know, for me, it's like I have fun in the work. It's, you know, we're at, you know, we're at,

you know, we'll be at 450 million as far as actual assets under management, you know, and plus in about a year's time. But the goal, you know, someone asked me the other day, well, what's your long-term goal? I'd love to be at 10,000 plus doors between the southeast and the southwest. We're going to start a Southwest Division within the next 18 months. What states are you going to hit there? Great question. So southeast, we're in currently Georgia and Alabama, and we're probably going to buy our first asset in Nashville because I have a key employee that's joined us who's based in Nashville,

so I'm going to buy something there. You have numbers pencil in Nashville? They are because of what's happening with the interest rates. Personally, I love these high interest rates for what we're doing on the acquisition side right now at ARC. They're allowing us to buy while others are on the sidelines. So I feel like we're going to have a good entry point if the interest rates stay high in Tennessee and then the Carolinas is where I'd also like to be.

I'm staying out of Florida purely because I'm a cautious, boring investor, as you know. Immigrant mindset. Exactly. But I can't do anything about what's going on with weather patterns and the fact that insurance is going through the roof in coastal areas. So I'm not coastal in the southeast. I'm inland where I can handle my insurance costs. I want to make sure I can control everything as much as possible.

In the Southwest, like I said, California is not in play right now, although I'd love it to be, but it isn't. So we're probably going to start in Arizona and Nevada, Phoenix and Las Vegas. And then I also like Colorado and Utah. So if I had 5,000 units in the southeast, 5,000 of the Southwest, call it in a dream scenario, a couple hundred thousand per unit as far as costs. So that's, you know, it's about $2 billion worth of real estate. That's the five to seven year goal. So I need a lot more people to want to come in and invest with us.

Yeah, hey, hopefully this podcast will get you a couple people. I hope so, too. I hope so, too. Absolutely. Now, what really motivated you to start your own company? You know, I love the fact that we live in a very expensive part of America, because that's what that's what helped me have no choice 100%.

You had Glenn Stearns. Success isn't an option. Totally. You had Glenn Stearns on your show a few months back, and he's a legend, right? And he talks about how he was resting on a bench in CDM and then found out he's like, what does the homeowner do? And so it was the same thing for me. I was an engineer at a great company, Broadcom.

And engineering wasn't going to get you to Newport. Not, not, I was a good engineer. I wasn't like the best engineer on earth. Unless he invented something. Exactly. Right. And so having said that, I was like, okay, real estate looks like a path that I can do something that I love. You know, I'm naturally a people person. And I was like, okay, let me try and see how big this could get. And that's really what this is, you know, becoming. It's really aspiring to bigger things because we're in an area where if you don't, then you can definitely feel like you're getting left behind. Yeah, you don't strike me as an engineer personality. You know, it's not.

But you know, it's funny, I geek out on tech. Like, even the studio setup you got here, you know, for me, I understand the tech behind it. So, you know, I love what's going on with AI. I love what's going on in general. And the kind of stuff I used to do at Broadcom, it was like programming into semiconductors that went into things like iPhones and TVs and DVRs, all that fun stuff. I love that that you segue it into AI because AI is obviously a revolutionary, every business. We continue to implement different AI solutions and strategies into our

ecosystem and tech stack now. So what are you guys doing at ARC to implement AI? Great question. We're using a lot of it. A lot of it right now is being used among our teams to make sure that we're being as efficient as possible and being able to, by efficient, I mean, if we can get a lot of the back office work done, it allows our on-site teams to really be obsessed about the customer experience at our assets. Our Our smallest asset has 102 units. Our largest asset has 420 units. So these are big properties, right?

And so we need to make sure that we're connected to the tenants. I think AI and technology in general is a blessing when it allows you to free up your time to have more human interaction. Because ultimately we're creatures of interaction and communication. So we're using it for that purpose. We haven't yet gotten, and we do also have tools that are used to do virtual tours of different assets. someone's coming in when the office is closed at any of our assets, they have the ability to get into our model, get a visual tour of the model, and then they can, you know, ask, online, they can get into the point where they're leasing a property without having necessarily

talked to one of our on-site team members. So there's that level of technology that's being used. It does play well, especially with millennials. They actually don't want to come in and meet someone at one of the clubhouses of our assets. It's more, they want to see the product, see the amenities, and then make a decision. So that, it's been very helpful there. But like I said, for me, it's like how do we use technology to free up our time to, you know, work even more and more on culture? Now, I wanted to segue, because we're talking about AI.

Now, given all these new revolutions, what do you foresee in the most? multifamily space in the next couple years? I think there's going to be, you know, let me break it up in two parts. One, the situation with interest rates and what we're going to go through as far as unwinding of, you know, certain assets that are probably going to go through some tough times. And then secondly, we're going to see the actual trends in the industry. So as far as the interest rate environment, you know, the last couple of years we've had a higher interest rates, which at ARC has helped us buy assets at prices we wouldn't have gotten

when interest rates were lower. So it's been a blessing. We aren't selling anything right now. We do have a few assets that are probably that are ready for sale. We have a three to five year business plan on our assets. Some of them we've really crushed the ops. And so we've only owned it two years. But if we were in a lower interest rate environment, I'd be selling for a profit and then cycling

the money. We try in 1031 exchange into the next asset. Right now we're on the sidelines on selling, but we're. Instead, we're working really hard to bring in investor capital to buy where it makes strategic sense to do so. So I do think there's going to be turbulence caused by the higher interest rates because of the fact that you've got competitors that have assets where their debt is resetting. And so they might be in a 3% mortgage. They're going to a 6% or 7% mortgage in multifamily. And they don't have the income to support that.

So they're going to have to either get equity injection. I'm getting approached by other operators that are asking us to come in with rescue equity. And we're actively looking at those opportunities where we can bring our own expertise. Because we also do, we're vertically integrated. We have on-site property management at our assets that is run by ARC. It's a separate company we call Axia Residential. We're very, very heavily based in operations. And so if we can add strength to an asset, we'll look to partner with someone if it makes sense to do so.

So there's that opportunity. That's a huge opportunity. Yes. Because that could, like, companies like yours will save the multifamily and commercial space in general with that strategy and mindset. Yeah. There's a huge fear right now economically that, you know, commercial is just going to plummet and totally implode and then cause a more devastating crash than the 2008 crash. But what's your opinion on that? So I think certain sectors are going to be in real trouble.

It's very hard in office right now. I mean, you know, the work from home has fundamentally changed office. And there's also functional obsolescence of office buildings that is hard right now. So I don't have an answer for how we're going to get through the office dilemma. The other segments, I think that if you've got good fixed rate debt and you've grown your income significantly, you know, we've had inflation the last three, four years, but that's actually caused, in some cases, our assets have seen rents grow by 30% plus. Yeah. Sadly, though, that's sad.

Right. I mean, it does impact the consumer. But from an operator's perspective, you know, if debts up a little bit in price, but you've grown your income that much, you've got no problems. So in general, I don't think multifamily is going to be, it'll get hit, but it's not going to be decimated. I think office is going to have, you know, a lot of distress that's going to have to be worked out between banks and operators, because the banks don't want to take back the real estate, especially something like office where they, you know, it's not like they can just go lease it up right away. Multi-family is a little bit easier in that sense.

But to your point on trends that I see happening in multifamily, I think there'll be continued adoption of technology. I think that we are becoming more of a renter nation. Millennials are more inclined to rent than to own. And so I think that there's going to be more and more demand for multifamily as time goes on. I think there's also going to be even more and more 55-plus communities that are coming up as the boomers are aging, you know, wanting to potentially sell their properties if they're living in colder states and want to come south. They may not want to buy. They might just want to rent. And so I think there's going to be active lifestyle communities that, you know, are already active but are going to, or already prevalent, but are going to get more and more as the boomers become a bigger and bigger part of the apartment renting sector.

Now, how do you think AI is going to affect the multifamily space? I think that we're going to have more and more use of automation. I do worry that we'll get to a point where you have almost nobody at certain sites where you've got just a you walk into a clubhouse at a 400 unit apartment complex and you talk to a screen and you do everything remotely as far as service requests and everything else. And that might be the most profitable way to run things, but I think that it takes away from the consumer experience.

So I think, you know, I'm hoping there's a hybrid of the two where technology enriches the end user experience, but it doesn't make it so cold that people can't feel like they're part of a community. Because I think everyone wants, you know, a home is a home because it's got a sense of warmth, whether you have a, you know, a big house or you have a modest apartment, but are part of a larger community.

It's like, you know, that there's something to be said about being connected. I hope that always remains. Very well said. Now, given all your success over the years and, you know, how established you are currently, how do you continue to find motivation every single morning getting up at 4.30 a.m., knowing that you don't have to do this anymore? You know, my motivation comes from being able to, I'm at the point where I enjoy seeing, and this is from talking to mentors that are 10 times bigger than ARC is,

and have been doing it a lot longer. They're like, you know, you get to a point where you're serving, you're growing a company because you're helping people with jobs, which is great. You're providing a great experience for your tenants. But you're also helping your investors. That number, we've got 200 plus investors. One day, that'll be 1,000 investors.

And so I am helping those investors grow their wealth, which I hope allows them to live and lead better lives. But I also have, you know, part of my intentions as well to be able to give back tremendously to the community, have a foundation, and have a purpose for getting up. You know, my wife and I, Amy, have two kids who are wonderful. You know, they're eight and five. They're growing up really well.

I hope one day they want to maybe take this over. But at the same time, I want them to go out there and have a real sense of purpose. And I think, you know, for me, as I age, one of the biggest things is trying to make sure the world is a better place. And I think that that Arc is going to allow me the platform to do that if I continue to scale it responsibly. Excellent. Now, what I noticed when I first met you, one of the first encounters, you had one of the – This is great coffee, by the way.

I know it's coffee for closers, but I mean – Hey, we don't just serve coffee here. We serve cappuccinos here. Absolutely. Now, what I noticed that you have a lot of talent at Arc, a lot of very talented people. How are you fostering talent within ARC? You know, I've been blessed in that my early employees came from some real powerhouse, multifamily players, like multi-billion dollar players that get the blackstones of the world investing with them. Um, you know, and so I've been able to

get talent from those companies by just giving people. Um, so I started with some great employees who then told their friends and told them what we were building at ARC. And so I've had, I've had that grow. But one of the big competitive advantages that I have is I come from from my time at Broadcom, you know, the founders of Broadcom did a phenomenal job at getting employee engagement. They hired really good talent, but they also were able to keep them because they gave them equity in the company. And I'm doing the same thing at Arc. It's a totally different platform. That's a, you know, a trillion-dollar tech company, and we're a, you know, less than billion-dollar multifamily operator. But my employees, the intention is for them to earn equity.

as we succeed on properties. Not only are the investors going to win, and obviously my wife and I will too, but I want the employees to feel that win as well. And I think if we do that, the culture will be there because we work really hard, but why not have them build wealth along the way? It's super important to me. So that's your culture secret there, getting them all bought in, and they're all like owners in your organization.

100%. Yeah, we grant shares to our senior people on all of our assets. And as we scale, that's just going to continue to be my intention is to carve out, You know, I make a little bit less profit, but I have a great team that's watching the asset because they are owners. I just think that's the right way to go. Yeah, that's a great way to foster talent is to get them bought in that way. Yeah. Now, how important do you think taking risks are for ARC?

You know, I, we try and make sure we have a strong competitive advantage on everything we buy. We want to make sure that it's already a performing asset. So I'm not looking to take excessive risk at this point for myself. for your investors, yeah. Yeah. But early in the game for someone, I think taking strategic risk is important. You have to think big. Yeah, buying a $3 million piece of dirt in Newport Beach and building a $7 million house on it.

That's a pretty big risk. I mean, that's risk I take with you, Joe, and a couple of buddies, right? Who are also, you know, in our private lives, you don't mind gambling a little bit, right? But when I'm, as in scaling the investors, we have $100 million. I want to get to $500 million sooner rather than later. You're more risk adverse with the bigger stuff. I'm pretty boring with that stuff. It's like I want to make sure that everybody's sleeping well at night.

But, you know, to further your question, early on in someone's career, I think you have to take risks. You're never going to be, you know, today is the, you know, you're never going to be as young as you are today. Yeah. So why not do the things you want to do? Take the risks. Make sure they're calculated. Get the right kind of advice coaching. You know, I'm a big proponent of not solving problems in isolation.

You know, Sharon Shravatsa says his, his, his. trademark is that transformations do not happen in isolation. And it's so true. Get the best people advising you. And it may not be direct advice. It might be from listening to podcasts. It might be listening to YouTube. Like listen to the show. Absolutely. A hundred percent, right? It's just like soak it in, take some nuggets from these kind of shows. And then from there, great things will come if you're willing to take strategic risk. And also like save money. to make sure on rainy days are the best times. Like right now is a great time to be buying.

When I'm talking to investors and they're like, is now a good time with the interest rates high? I'm like, this is a phenomenal time. It wasn't easy to buy stuff two years ago when interest rates were 4%. But right now, when they're at 6 plus, it's like kid in the candy store. I love that.

Yeah, and you're absolutely right. But I didn't think of the landscape of multifamily with the capital injection strategy that you're leveraging right now. I'm excited about that. We've got our first two that we're going to be accomplishing this summer. where we're coming into assets.

How will the returns we're getting now or what? I hope so. Honestly, it'll be some juicy stuff for sure. But it also is one of those things where I look at it from a relationship perspective, like the investors who are in those deals that we're bailing out are going to know that we bail them out, right?

And we'll be humble about it, but don't want to come on because of the fact that these sales succeed. Now, if Robert Pereira was to meet the 20-year-old Robert Pereira, what's the best piece of advice that he would give him. That's a great question. I would say, think even bigger, right? I think, if you, and work really hard, but dream big dreams and get a mentor sooner. I got my first mentor. I mean, candidly, you know, I think you could say, you know, my parents were mentors,

and they have been, you know, very supportive throughout my life. But my first real mentor was Sharon Shrivata, and that was seven years ago, eight years ago, and I'm 46. So I'm not my first mentor 18 years after the 20-year-old could have. He's your age, right, or is younger than you? He's younger than me. And he looks

way younger than me because he hasn't flipped 250 homes, so he's got no gray hairs. Yeah. So, yeah, but it's been instrumental. As soon as I, you know, brought Sharon on my team, things lit up, and from there I've continued to, like, for me it's about collaboration, and someone might

be a mentor or they might be a collaborator, but it's that collaboration that makes it so powerful. I was telling you about, you know, you and I, you know, we live in the same neighborhood. And when you had bought your place, I said to our, you know, the person who built your home, I'm like, I got to meet Joe, right? And two weeks later, we were, you know, having a barb in my house and hanging out. That the 20 year old me is crucial. And the 20 year old me wasn't thinking that way. And I, so I tell anybody who's young, it's like, get out there, meet people, network.

trying to bring tremendous value because you can't just hang out. After a while people are like, okay, what are you doing in the room? You need to bring value, but get in the room. You know, truth about me is like, I'm actively looking for mentors all the time. Like, please mentor me.

Totally. You know, I got mad Ishby to mentor me because you were like, how did you get a mentor? You're like, I asked them. 100%. You just got to ask. Absolutely. Because mentors are willing to give

because that's how they succeed. You've got to give back. Absolutely. Because most people who have been very successful have been mentored. So I think there's a sense of obligation that, hey, there's a circle of life. And if people are giving back to you, how do you not want to give back to others? I see you all the time mentoring people.

You've got an army of people here at e-mortgage. And for you and for Sam, it's about, you asked me the question about how do I get up in the morning when I don't necessarily have to get up? Same thing for you guys, right? You're up for other people. And it's even sweeter when it's that way, right? It is. We live a service-based life. Absolutely.

And we try to do God's work through this organization. And that's our number one pillar. Our number one pillar here is serve. Just do God's work, serve with all your heart, all your might, all your soul. Our second pillar is community. Because through this community, we're able to collaborate and grow and win together because you don't win by yourself. No.

You don't win by yourself. So, you know, community and collaboration are basically, to me, the same word. Yep. Because the community is how you win. Yeah. The community is how you grow. and the communities how we're fostering talent. Absolutely.

Now, what are like some of your hobbies that you like to pursue? I love sports. So it was great. I mean, I watched your podcast with Matt and just to see what he's doing, you know, with the sons. I love, and I say love sports. I love playing sports, but I love watching sports too. Always been a fan. I don't get as much time as I used to.

But growing up, I mean, I was a. sports nut, like NBA, NHL, MLB, World Cup soccer, I mean, religious. So that's still a real passion of mine. And now I get to spend some of that time with my kids as not only are they playing sports, but also being able to watch and get them into the professional sports, you know, becoming a fan. You know, spending time with family is super important to me. As far as actual hobbies, you know, I do a lot of things that are outdoors. just in, you know, daily life. I love to, you know, work out.

I love to enjoy the fresh air, travel. Those are the real passions of mine. And I'm also at a point where I work is almost like a hobby for me. And what I mean by that is I pour a lot of effort into it. But I tap dance to work. Like it's a lot of fun to build what we're building. And it's a huge passion for me. It's what gets me up.

And, you know, Arc is very personal to me. I don't know if I told you this, but it's ARC, multifamily group, Arc multi-family group, and that's Amy, which my wife, Robert, myself, and then our children's names are Chloe and Christian, and so they're the C. And so my dad came up with the name when we were first starting. He wanted to name it ARC-C, and I cut one of the C's off. He forgave me, but it's very... I didn't know that it was named after he was.

but it's a cool name too. No, it worked out. It worked out really well. What's your favorite quote? My favorite quote. It comes from Kobe Bryant, and he got it from his high school English teacher, and it is rest at the end, not in the middle. You know, I'm 46, I'm midlife. I still feel like I'm 26 as far as energy,

and I've got young kids and a great wife, so I feel younger than I probably am. But I feel like this is not a time to rest. to be active. And for all of us, it's like, you know, go through life and be energetic as much as possible. You know, you get as much as you give. So just keep pouring in. And, you know, I think it's a more full life that way.

What's the best piece of advice you have ever received? Best piece of advice I've ever received, you know, honestly get the right kind of, what you pay for in consultants and mentors and coaches. is a fraction of what it'll cost you for trying to go it alone. I think when we, because I've made, you know, big mistakes along the way where, you know, when I first got into the luxury space before I started working with Drew DeAngelo, who's a partner of ours, and I love Drew. He's, you know, he's done extremely well for us. But before I started working with Drew and got his expertise, I went it alone.

And that's after being a developer for 10 years. And we did well, but we were much more marginally profitable. than when I started working with Drew. So, you know, in every facet in my life, you know, now it's, you know, I, uh, Sharon, uh, taught me a long time ago. It's like when, when a problem comes up, everyone that says how, how do I solve this problem?

Sharon's like, I always say who? Who's, who has already faced this problem? Or who can I call to help me get counsel before I even start to work on the problem and how to fix it? And I think if you, if you say who, uh, it's a lot easier. You know, if I have a mortgage need or someone's gonna come My own house when I was doing it at the time was a complex mortgage. It was an expensive mortgage.

And so rather than saying, okay, how do I figure this out? I was talking to, it was a home we were building, so I was already the developer in it, decided to keep the home, and I wanted to put it into fixed rate debt. So while I was contemplating that, I texted you. You connect to me with the right mortgage broker on your team, and we came up with a solution. Yeah, absolutely. So it's all about who, not how.

That really resonates with me because when I merged with my, partner Sam, Hajazen in 2020. And I was facing an issue of like growth because I couldn't handle all the growth and all the compliance. And I, you know, like who's going to totally handle this?

You know, so I brought in my partner, Sam. And we exploded. Absolutely. You know, because, you know,

I'm good at one part of the business and he's a genius. Yeah. At the other part of the business. And he was able to help us catapult, you know, 10x our business. And within the first year, we doubled their triple. Absolutely.

When I first met Sam three years ago, like I met, we chatted, we went out and had some dinner. I only after learning later on that you guys had just started working together a couple of years before, I had thought you guys had built this together since you were like 20 years old because you're so ying and yang as far as being able to like, your opposite sides of the business, but you bring so much together that that's why it's exploded. But it's also like you can read each other's thoughts because it's like, okay, We are like brothers. We've been best friends since we were 14. So we're like mind readers.

But it is great, right? And it's almost sweeter when you're building it together, right? And that's also what makes what we do so amazing because since we were kids, we always just wanted to hang out and just hang out together. So now we come to work and I'm like, you know, it's like I'll never want to stop doing what I'm doing because what am I going to do? I got my best friend. I got my brother and my family. It's like everyone's here. We're just hanging out.

You know, like whatever tribulation, you can throw the craziest tribulation at us. Yeah. But because we're family and we have so much fun together and we really enjoy this organization as a big family, like nothing can face us. Well, I'll tell you, in the time I've known you, Joe, you've helped me a lot vision-wise. When Drew first told me you were working with him, mentoring him in the, he's a prominent realtor and developer. And, you know, he was telling me that Joe. I hadn't even met you at the time, but Joe, he said, you know, Joe wants me to try and do a billion-dollar brand. And I'm like, who's this Joe?

And a billion dollars is a lot of money, right? And then after having met you, I'm like, okay, this is great. Joe's dreaming that and going to create that for himself, but he wants that for the people that he's mentoring. Right. And that rubbed off on me as I was transitioning from luxury into arc and kind of created that scale culturally. I love coming here because what you've got at HQ is like the, like, not only do you have all the fun you've got the basketball nets and everything else, right? It's everything that can give people an opportunity to have fun at work.

But at the same time, totally. But the cultures can affect is infectious. Yeah. You can just tell that there's people that get here at 6 a.m. and they don't leave. They live. They eat. They enjoy it. And part of it is like it's one thing to be at work.

It's another one to feel like you're not at work, but you're succeeding because of that. And I think that's the kind of culture you've created. Candidly, I'm going to continue to copy that because I've learned a lot from you. There's a quote that we had a guest named Matine Cleves on this show, and he says, you either, do you like it? Do you love it or do you live it? Totally. And what we try, what we want our people here to experience is live this.

Yeah. This is life. This is the best. You got to go beyond liking it. You got to go way beyond loving it. You got to live it. Yeah. And that's where you really accomplish success and happiness.

Totally. And I think that's where, like, we work in products that are similar in that, like, there's a lot of day-to-day work that has to get done to get a mortgage over the finish line. Same thing with what we do at the property management side at ARC. So there's a lot of mundane tasks, but what kind of culture have you created so that people are taking so much pride in the mundane to make sure that it's a great experience for the end customer, right? And you guys have done a great job with that.

Now, a couple last questions here, and this is a really important one for listeners, is how would you advise a 20-year-old to build wealth? I would advise them to get world-class at something. First, look for something that's got the ability to build wealth, right? You've got to find something that is scalable and that actually can have the numbers add up. So, you know, talk to mentors and try and find something that fits your personality that allows you to, you know, create that wealth.

And then after that, just go about focusing on just being as world-class as possible at it. You know, don't be lifestyle-driven. You and I are still not lifestyle-driven. We live well below our means. I'll always be in that boat because I'm just comfortable that way, but I'm most obsessed about making sure that I'm much better six and 12 months from now at what I do than I was in the prior period. That's excellent advice.

Now, what's the most painful thing you've ever been told? The most painful thing I've ever been told. You know, along the way I've had people doubt me, When I first started flipping homes, they're like, oh, you know, you can't make money at that. Or, you know, when I transitioned into luxury, it's like, oh, my God, you're going to lose your shirt. So, you know, there are haters out there that will tell you it can't be done. That fuels me. Like, I honestly, I have a positive personality, and I like to think I do anyway.

And I go through life happy. but I also, I like the Michael Jordan analogy where it's like, you know, sometimes you need to have targets and you need to have access to grind, even if they're just kind of like small slights along the way. So I use it as fuel. Someone tells me it can't be done. Right now we're building an apartment complex. We're in the stages of building it. I'm buying the land next week to build 175 units. It's going to be right next door to 420 units that I own.

And so it's logically one where I think we're going to have tremendous success, but I know I've had people in the industry tell me, oh, you can't do that. Like if you're not a builder, despite all my experience, I've built 250 homes, right? It's like I know what I'm doing, but I've got people that are doubting me right now. And that's a lot of fun because I get an opportunity to prove them wrong. I'm doing it for our team and for the right reasons, but along the way, it kind of quiets people. You know, you let yourself be so good at what you do that you're saying. success speaks for itself. You don't have to beat your chest. Now, a couple last questions here. It's a three-prong question.

Okay. Okay. What's a personal goal that you have for yourself? What's a goal that you have for the family? And then what's a goal that you have for ARC? Okay. Great questions. I'll start with least important and go to most important. And for me, the least important is the goal for ARC. What I mean by that is it's most quantifiable, right? And so for ARC, I want to scale tremendously from where we are, but scale responsibly. You know, put the right people in place to allow ourselves to build a big company that is a great steward of our investor's capital.

So we've got just a terrific track record. We're four years in, I want to be able to say at 25 years in that we've, consistently returned, you know, that 2X, if someone puts $100,000 with us, between cash flow and equity, we've turned it into $200,000 for them, you know, every five years or sooner. That's the goal at ARC while at the same time building a great team that's bought in both culturally as well as invested in their success, you know, because I think it's the right thing to do and I think it's, you know, I have the right, we have the right fabric for making that happen. on a personal level, because I feel like my family is even more important than my own personal

goals, is to enjoy what I do at ARC, maintain good health, and then be a benefactor to others. I'm not doing what I'm doing just to live a better lifestyle for myself. That changed a long time ago. It's more about how do I better the communities that I'm in? How do I make sure that we have a foundation that gives back in a very meaningful way? to those in the world who are less fortunate. And then also at some point, I'd love to get into a position

where I can strongly influence people at getting into careers that allow them to make an impact as well. So they think beyond just the nine to five job, want to get into entrepreneurialism, and give themselves an opportunity to create something totally amazing. At the family level, which is most important to me, especially for Amy and myself for our kids,

is make sure they're happy. I think that success is a great thing, but success does translate into happiness. And it's not just financial success. In fact, I think it's well beyond financial success. It's doing what you're meant to do, feeling like you've got a purpose, and that what you're doing matters, you make your contributions matter, and that you're healthy and happy. That's the biggest goal I have for the time I have left.

Excellent. Now, my last question, when you're in front of the pearly gates, what do you think God's going to tell you? I honestly believe that God's going to tell me that he's put amazing people in front of me and alongside me to help me do something tremendous with my life. And I think he's going to start with that. And then I hope he says to me, and you did something great with it, and you did make an impact with what I gave you. The flip side of it is you might say, you know, I put amazing people in front of it. of you and you did well, but you didn't make the impact because you forgot that part of the equation. So I'm very cognizant of the fact that you have to give back. You have to try and

help other people along the way. Right now, it's the people that are working alongside me at ARC. But over time, it's going to become much bigger than that, where you want to, you know, try and give everybody the shot at, you know, that proverbial American dream, right? That opportunity to go from humble beginnings and create something really amazing to then give back and continue with that circle. Excellent. Robert, this was a great interview. Thank you so much for sitting down for this podcast. I hope that the guest got to dive deep into Robert's brilliance

and into the multifamily space, which is booming right now, and it's going to continue to explode under your vision, under your leadership. God bless you. God bless your family. Thank you. Keep dominating. Absolutely. And if people want to reach out to you, how do they reach out to you? Yeah, there's a couple ways. Our website is ARC-M-F-F-com. My email address is Robert at ARC-M-F.com.

She shoot me an email. Let me know that you heard about ARC through the Coffee for Closures podcast, and I'm happy to connect and help mentor people, give them advice on what they're doing in the real estate investing space. I've been doing in a long time. Happy to just serve. and if they're interested in learning more about ARC as an investment opportunity, you know, just hitting me up by emails the easiest way I'll respond to everybody same day.

Awesome. Thank you. Thanks, guys. God bless you guys. Thanks, Lange, Jim.