Epic Real Estate Investing - Virtual Investing Simplified | Sharad Mehta | 1021

Episode Date: May 17, 2020

In today’s episode, Matt is joined with Sharad Mehta, a very active real estate investor with over 600 deals in the last 10 years and a CEO of REsimpli, a cloud-based system that makes real estate investing more efficient by automating tasks. Tune in and find what void Sharad saw in software space for REI that inspired him to create REsimpli, how he manages its heavy data-based system, and what big risks he sees in the shifting market, right now. Tune in and find out more! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. Success in real estate has nothing to do with shiny objects. It has everything to do with mastering the basics. The three pillars of real estate investing. Attract, convert, exit. Matt Terrio has been helping real estate investors do just that for more than a decade now. If you want to make money in real estate, keep listening. If you want it faster, visit R-E-I-Aase.com.

Here's Matt. Hey there, Epic Investor. It's Matt Terrio from Epic Real Estate, where we show people how to invest in real estate with an emphasis on retiring early. This is the Epic Real Estate Investing Show, and if it's your first time here, really glad that you found us and kick up your feet, sit back, make yourself at home. If you like what you hear, make sure you hit the subscribe button before you go. And if this is not your first time here, welcome back.

And thank you for sharing this with your friends and family. I really appreciate that about you. And I've got a great guest for us today. A very active real estate investor. He's done over 600 deals in the last 10 years since he became a full-time real estate investor. And over the years, he's developed systems to automate many parts of his real estate investing. Systems and automation are near and dear to my heart. So I'm excited to talk to him.

He works in Lake County, Indiana, and he manages his entire business from Carlsbad, California, where he lives. So using the systems that he has developed, he is able to manage three to four rehabs month from a distance. So let's talk to him about it and see how he pulls off such a feat. Please help me welcome to the show. Mr. Sherad Meta, Sherad, welcome to the Epic Real Estate Investing Show.

Thank you, Matt. I just want to correct one thing. I actually now live in Toronto, Canada. I'm a Canadian resident if I move back. Sorry, so the profile that I'd say he wasn't updated. My apologies for that.

Okay, that's okay. Well, that makes the story even more compelling. So you're doing it from another country virtually. So this is awesome. I know I have many Canada listeners and I even have a couple Canada clients and I can help them with the principles and the concepts but with the actual real estate part and the nuances that each market has unique to them. It could be difficult for me to give them the kind of support I want to give them.

So glad you're here. Thanks for being here. Thank you for having you. I appreciate it. You bet. All right. So let's see. You've done 600 deals in last 10 years since you became a full-time real estate investor.

What were you doing just before that and how did you get into real estate? I was an accountant and I was working for one of the large accounting firms. So the CPA. I started into real estate because I wanted to basically retirely. You know, I wanted to have passive income. So I started my investing career by buying a bunch of rental properties, which I still have. I have about 75 units paid for free and clear. So I can apply buying rental properties.

Then I moved into investing and whole saving. and then I have a software company now. Got it, got it. I've got a student. Very similar story. Did this for 10 years and built up 80 units and then he went and started a software company. So I attract you people.

It's good. All right. So the question I had there was, oh, being a CPA with so many different options there to retire early, what did you know or learn about real estate that made you choose it? You know, I have to say the biggest thing was having control of asset versus investing in, let's say, stock, bonds, or, you know, mutual funds for it. I didn't really control the asset. And I also like the fact about real estate.

It's an tangible asset. You know, I control it. I can see it. I can touch it, you know. So I like that about real estate and passive income, of course. Mm-hmm. Right. Got it.

No, that's probably the best answer you could give in because I think it's all about controlling the asset is what makes real estate so great. Right. And predictable. and manageable and you know you can actually influence it and and steer the ship as far as uh so you can direct your outcome the uh so you're running a software company from Canada and I want to talk to you about that because it's all about automating a real estate investing business wholesaling specifically what do your real estate efforts though look like today uh so I have so I live in Canada I have a team

of acquisition you know a VA and then a project manager so we do a lot of fix and clip We sell a lot more properties to turnkey investors. We have a property management company. So my involvement is more on basically making sure we have a good vision for the company and putting the right people in the right place so they can, a right seat so they can succeed. So only one person from our team is actually based in Indiana, which is my acquisition person.

Everybody else is a project manager lives in California. So she manages all the projects from California that are actually happening in EAS. That's remarkable. How has business changed for you in the last, I don't know, eight weeks or so? Actually, I mean, our market has been strong. I mean, it hasn't really slowed down. I mean, one thing that has changed for us is we're focusing more on, let's say, under $200,000 properties. You know, even if for some reason they don't sell, we can always keep them as a rental property.

I also own a property management company. So some of the properties that we had initially bought with the intention of selling to homeowners, now we are moving them to a turnkey investment towards rental property and then selling to other investors. If the investor doesn't want to buy it and keep it for my portfolio. Got it. So we've got a plan B in place and you've adjusted it so you make sure that you have that moving forward. Yeah, luckily we didn't have too many projects that we were sitting on.

that would be like higher-end flips that could only be good for homeowners. We had several that we could just sell to investors instead of homeowners. So that's worked out okay for us. Nice. All right. So moving forward, do you see just business as usual, or are you making some adjustments for the shifting market? We are making some adjustments.

We're being a little bit conservative with our buying. You know, we're not being as aggressive as we were, let's say, back in February or early March. we're just being a little bit cautious with our buying price and maybe taking off additional 5 to 10% depending on the market of the ARV just to have that in extra buffer and then if the property is overlaps in our market over ARV of 200,000 then we're not really going after it unless the numbers are very very good so can shift it our focus towards sub 200,000 I think I obviously think the market will slow down a little bit before it picks up again So they're preparing for that sitting on some cash as the market shifts and there's some good opportunity.

We can pick up maybe some good more rental properties. I concur, but there's just so much uncertainty. How could we possibly know? Exactly. Yep. Yeah. I think we're doing to know how this whole thing is going to unfold. Mm-hmm.

Mm-hmm. So 600 deals in last 10 years. What has been your primary source of your deals? How have you found your deals? I bought my first property back in. August 2010, I would say, until 2014, 15. So it was pretty much everything, MLS, few properties here and they're from wholesalers.

And then the focus started shifting more towards our own marketing. And it's been majority from direct mail, I would say in terms of volume. We get most of our deals from direct mail in terms of RIO, PTC is the highest ROI for us. Mm-hmm. So it's still direct mail. today still working for you really well.

Absolutely. Got it. Are you sending letters or are you sending postcards? We do mix of letters and postcards. Mix, got it. Has that messaging changed for you as far as what you send out over the years? Not really. We're not sending any COVID-19 specific letters.

You know, we're just sending generic letters. I mean, for us, the biggest key has been to be consistent with our marketing. I mean, we own a direct-neal company also. and I've no disperse me for myself and other investors are successful. It's not so much like the best design, the best wording, it's the consistency of being motivated seller month in month out. Right. So it's the consistency and what does your volume look like?

In terms of mailing or deals that we do? The amount of mailing, the marketing that you're doing. We do about 20 to 25,000 mails a month. Okay. Got it. That's good. I can see that just the consistency with that type of volume. Yeah, you don't have to be that sneaky or trickier

or clever on the messaging. It's been my experience as well. So you own a direct mail company. How is that business change for you in the last eight months? Because someone that has a direct mail company kind of has their pulse on the, or their finger on the pulse of other investors. Yeah, I mean, it's part of our stockware company

or directly is a piece of it that we offer. It's slowed down. I mean, it's slowed down, you know, end of March to like beginning, I mean, mid-April to, like, you know, but end of April. It's trying to pick up now again. You know, people are realizing the market hasn't shifted as much as much as they, you know, thought it would.

So we're seeing an uptake of investors coming back to direct meal. Yeah, I mean, as like people have tried texting, call calling, ringers, voicemail as, you know, those are, you know, new shining outfit and as they start to fade, fade out, and people come back to direct mail, which I personally think is the most consistent, you know, for long-term lead generation. Mm-hmm. Right. So, yeah, I mean, we've seen people come back to, it's the direct mail site has picked up

again. It was slow in end of March through April. Mm-hmm. So you've got one acquisition guy on the ground in, in your market. How does your communication with, is it him or her that goes back and forth? We have a daily call at 10 o'clock every day just to kind of catch up on what's going on and if not. And if she goes out with an appointment and we'll talk about how did the appointment go, how much do you offer it, right?

We're negotiating on a package of seven properties. It's kind of going back and forth on. We know like two properties that are the price chem out of the seven. So we're going to negotiate on them, make sure these work out and those other five would be born. So, yeah, we have one problem on a daily basis. And after that, we'll do like a call or to a day depending on, you know, what she's negotiating on.

Got it. Has she commented on how her conversations have changed with homeowners? I mean, for some investors, I mean, some sellers are not as complete going to having people come out in their houses. So we've shifted to where we'll say, hey, take a picture, make a video and send it to us. You know, and then we can make an offer on that. What we've noticed a lot lately is people are saying, hey, I just want to wait and see how this thing is going to unfold. Because when you look at it, like, people don't have any motivation.

I mean, they don't have any sense of urgency. They're not getting foreclosed on. They're not getting evicted. You know, even like they don't have to pay their utilities. I mean, the utility is not getting shut off of it. Like, they don't have any, like, I mean, their bills that they have to pay, but they're not in. a gun to pay, you know, otherwise they can get four closed on or revicted on.

So I think, like, that's where a lot of people are saying, hey, I'm just going to wait and see how this thing is going to unfold. So that's been the biggest thing we've noticed where people are, just again, you know, like you mentioned earlier, like it's uncertain time. Nobody knows what's going on. So people are taking wait and watch approach right now. Is that coincided, like, with your response rate from direct mail? Is it kind of slowed down a little bit?

It has. It has slowed down. you know people I mean people are calling you people who are motivated are still calling but but we're getting a lot more people saying hey I'm just going to have your letter I have your postcard I'm just going to wait and see you know give me like a month or two and and I'm going to see how this thing unfolds and I'm going to get back even on our follow up when we're you know sending text or calling them back you know on our follow up same thing that I'm just going to wait and get back to you when I'm ready to sell which we really have a little

lot of. So last few weeks, it's been the majority of the sellers are just basically saying, I'm going to wait and watch. Right, right. Well, thanks for sharing the behind the scenes there.

We've kind of taken the temperature of our guests this month based on the current market conditions. And, you know, there's some nuances from market to market, but the consensus is generally the same. So you answered the questions correctly. All right, super.

So, I mean, I'm just, It was starting to come to me as I was talking to you, very similar to one of my client's stories, how he went out and he created, he left his corporate job of 10 years. And he became a real estate investor, became a client of mine, did a guy like 80-something rental units. He did like 300 deals in his first 18 months. And he kept 80 of them for himself for the passive income and went out and started a software business because he saw a void in the market for real estate software. And you kind of remind me of him. So I can imagine you're, you're very thorough, you're very detail-oriented,

you're very diligent, and I'm looking at your website right now. And so you started the software company. What void did you see in the software space because there's so many to choose from? What void did you see and what problem did you see that you could solve differently? The biggest need was, for example, in our business,

so the software company started when I was living in Chicago until 2015 and I moved to Costco, California, but I kept, you know, I still had a registered investing business. So when I moved, you know, we were doing a lot of marketing, we were buying properties, fixing and flipping them. And we also had been to property.

So, and there was no solution where investors could kind of run their entire business from one platform. You know, they would have to, you know, for their lease, they would have to go to the CRM, for their project management, they would have to go with different software, for their property management, they would have to go to another software. And then if they wanted to order direct mail,

they would have to go someplace else. And then if they wanted to actually get their financial, they would have to put in quick books, but other accounting software. And then none of these actually spoke with each other. You know, they were independent software. So the idea came where, you know, I needed a solution for myself.

And so I thought, okay, let's create something where my entire business could be run from one platform where my lead manager, my acquisition manager, my project manager, my office manager, my bookkeeper, my marketing manager, that everybody could be on the same platform. And then we could get the best KPIs, the most advanced data possible in the business.

So that was the need that, you know, we saw. And now that we have, you know, several, we're close to 150 companies using it, you know, it's good to get that, good to get that validation that, yes, you know, it is needed, it is a need. And then we're kind of adding more and more services. Our goal is basically, like,

90% of the business that an investor wants to do, they should be able to adjust from our platform, from marketing all the way to financial, you know, reporting, accounting, taxes, and everything in between. So that's our vision. Got it. Yeah, I'm looking at it. It's data heavy. How is you being able to interpret your data and having access to your data to this capacity? How has that impacted your business?

Oh, it's been a huge difference. I mean, just like knowing simple things like what's our cost for lead, what's like cost for doing by every single campaign that we're running in our business, especially for direct mail, which can get super expensive. It's made a difference, you know, some of the things that if I need have the data, I would have guessed that, you know, probably this marketing is not working. For example, like we picked up, you know, a bunch of views this year from our homeowners with high equity, you know.

So that's been like one of our good list. this year, which I would have never guessed, you know, because it's one of the most heavily targeted list. But now that we have that data, you know, that makes a big difference. Just like helping us make better decisions on kind of, you know, how our marketing is working, even like on the flip side of it, when they're flipping properties for us to know, like, what from the time we buy a property, how long does it take, you know, when we started, how long does that we have, how long is our property listed? You know, just knowing, all those data points that's made it different,

you know, just making us more efficient or at least being more aware. We're not as efficient as I would like us to be, but at least we're making progress. Like every day, we look at the data and we know kind of where the inefficiency, like from the flipping side of it, it was a huge inefficiency where we were making profit,

but we went turning properties around as quickly as we could. And then we noticed our, from the time we bought the property to the time we actually started the rehab was taking way too long. So we had more contractors, a few other things and our properties are turning it on faster than they were previously. Got it. Yeah, I know I can see how that could be really useful.

That's, you know, anytime you want to take your business, I mean, it doesn't take an extraordinary, it takes work. Let me let me rephrase that. It takes work to get to anyone is a one-man person. It's reasonable if you put in the work and you got the right information that you're operating with and a little guidance. Anyone can get to a seven-figure business. But once you want to go and migrate above that, the data is really, really important, right?

Exactly. Yeah, 100%. I mean, it's amazing a couple of masterminds with some investors that are doing over seven figures in volume. And they don't know this data. What's their cost per lead? What's the cost per deed? You know, what's the ROI in every dollar that they spend in marketing? How much money is coming back into their business?

I mean, I feel like that's where you start getting a little bit of edge over your competitors, like knowing your data points. Remember the inefficiencies are in your business. Yeah, it turns in, eventually turns into a business of systems and optimization. And you can't have systems and optimize if you don't know your numbers. That's good. That's why I see the big difference is. Where else do you stand out?

I mean, it's all like the big thing is it's all integrated. Like a lot of investors that are using our platform, they don't need call-Rail, for example. you know, I mean, it's built in CRM. We're rolling out like list stacking, electronic signature. You know, they don't need a project management tool. They don't need a bookkeeping tool. So it's like everything that come in and everything is there for them to just run their business. And then how everything is integrated in our system from like, you know, how like our accounting system speaks with our CRM, with our project management.

and you log in, like you don't need really to do your wholesaling business. You don't need anything else. Like you have call real. You don't need call it. It's just the calling for China is built in. It's like for PR and your drip campaigns, we're rolling out list talking, electronic signature. So that's all built in. You just like log in and then we want you to focus on the business and not, you know,

so much fixed working on podium. We want you to work on deals. Right. Yeah, I left the, I left Podio about three. three years ago for the exact same reason. It was just like, I became more of an IT person than I was a real estate investor. Yeah, exactly. I mean, that's what our tagline is work on deals, not on Bordeo.

You know? Right. So, yeah, what do you? The investors are using our platform are coming from Bordeo. And then with the ease of it, they like the fact that they don't have to have, they don't need to hire a developer. Everything is just ready for them. That's awesome.

That's awesome. Is it, you know, can you just pull it right out the box and plug it in? Exactly. Yeah. Sweet. We haven't even said the name. AriSimply. RISMPLY.

If you want to check it out. Who is your ideal customer, ideal client? Right now it would be people who are doing marketing or wholesalers and people are doing fix and flip. We are working on property management. So eventually it will be your wholesalers, fix and clippers and landowners per drive. Now it's for wholesalers and people doing fix and flips. What do you see are the, we're moving into this shifting market and how much it's going to shift is debatable and maybe it doesn't shift that much at all.

We don't even feel it. What do you see are the big risks moving forward? I see big risk would be where people are being too aggressive with buying like higher end properties. That's the market I see slowing down a little bit. You know, we were in like a super strong economy before all this came to, you know, a screeching hot. So we were in a pretty hot economy. And then, I mean, there is still a good demand for housing, but it's going to be a little bit more affordable housing where, you know, like in our market, people who were going to buy $300,000 house might buy for like $2.25 to $250.

Because like the lending is changing, for example. You know, I mean, lenders are being a little bit more strict with their loans and stuff. So that's where at least, like, for us, we're shifting our focus, where we're not focusing on, like, higher end in our market, which would be over $250,000,000. So we're shying away from that in focusing more, like, ideally, below $200,000. That's more affordable housing for us in our market. So that's kind of where we're seeing, like, my acquisition manager, she's a license agent also. So she's noticing more activity in under $200,000.

pricing and the properties that are priced over 200, especially over 250. They're just sitting on the market and marketing a lot of action. Well, I'm looking for something that we disagree on so we could make an interesting conversation. I think we're cut from the same cloth. I think I see it just as you do. What's in the future right now for you, Sherrod, that has you most excited? My wife and I were expecting our second child in July, so that's so excited. Oh, congrats.

Yeah, thank you. Thank you. So, yeah, that's super excited. and we found her live in nanny. So she's going to be moving in this weekend. So that's exciting, you know. We have a three-year-old, so it's kind of hard for my pregnant wife to watch our three-year-old. So we come in and then moving in.

But on the business side, man, I'm excited about, I'm excited about the team that I'm working with. I'm excited about the stuff that we're rolling out on our software side. Super pumped about that. And then on the real estate fix and flip, you know, adding more properties to my rental portfolio. I mean, I own everything, or I should everything, like, 90 to 95% of my portfolio is free and clear. So I'm looking for to add few more properties to my portfolio, you know, as market shifts, which I think it will.

So pick up a few more properties that I can act to my portfolio free and clear and then, you know, keep focusing on the software side of the business to add one systems and processes. That's awesome. If someone wanted to get in touch with you, what would be the best way for them to do that? I mean, they can find me on Facebook, or they can go to re-esimply.com

and you know, we have our phone number, email, everything there, and, you know, we're pretty responsive. Perfect, perfect. So that's R-E-S-I-M-P-L-I. Yep.

...good-looking website. It looks like you got all the bases covered. So if you're looking for a new management tool, a new CRM, a new marketing platform and communication platform and data platform, which I think is where his really stands out, go check him out at reisimply.com.

And if you got any questions, reach out. As you can see, he's very approachable, very nice guy. And if you could see him on video, he's very handsome guy too. I know we all got the quarantine look going on right now.

Yeah. And I'm doing so many Zoom calls. So this is, it's going to be all this day. So that. The big joke is everyone's doing all these Zoom calls and no one has any pants on. I am.

I'm wearing pants today for the record. But Sharad, thank you very much. Let's stay in touch and let's do it again. Thank you, Matt. Thank you for everything. I appreciate it, man. You bet. My pleasure.

If you found this episode valuable, there's a good chance. You know someone else who would too, and then when their name comes to mind, feel free to share it with them and ask them to click the subscribe button when they get here. I'll take great care of them. All righty. That's it for today. God loves you. So do I.

Peace, health, blessings, and success to you. I'm Matt Terrio. Yeah. Yeah, yeah, we got the cash flow. Yeah. We got the cash flow. Yeah, yeah, we got the cash flow. You didn't know, home for us, we got the cash flow.

This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.