Welcome to a deep dive into the latest episode of the Raising Private Money podcast featuring Neal Bawa, a visionary in the realm of commercial real estate. This episode uncovers the methods and philosophies that have made Neal Bawa a noteworthy figure in the industry. Sitting down with Jay Conner, Neal shares invaluable insights on how to leverage data analytics, technological advancements, and genuine brand-building to elevate your real estate investment game.
Transforming Real Estate with Data-Driven Insights
Neal Bawa’s Remarkable Achievements: Neal Bawa, CEO and founder of two commercial real estate investment companies, is not your typical real estate mogul. With a background in computer science, Neal has seamlessly merged technology with traditional real estate practices. His pioneering use of real estate analytics has facilitated the acquisition and development of commercial properties across the United States. Under his leadership, these companies have raised an astounding $325 million from over 1,000 private lenders and investors, managing a portfolio boasting over 4,400 units.
Neal’s commitment to education is evident. With a top-rated free real estate data analytics course on Udemy, boasting over 1,000 five-star reviews, and an expansive reach with over 10,000 participants, Neal has democratized real estate knowledge. His multifamily webinar series also attracts over 5,000 annual attendees, further solidifying his reputation as an industry thought leader.
The Vision: PropTech and FinTech Innovations
Neal Bawa’s Forward-Thinking Vision: Neal envisions a future where real estate, augmented by PropTech and FinTech innovations, becomes a tradable, highly liquid asset class competitive with the stock market. This futuristic outlook isn’t just theoretical; it’s grounded in his vast experience and success. Neal believes that leveraging technology for data-driven decision-making is key to realizing this vision, enabling more informed and efficient investment decisions.
Strategies for Raising Private Money
Building an Authentic Brand: Neal and Jay Conner discuss the intricacies of raising private money, emphasizing the importance of building an authentic brand. Neal’s success is a testament to this approach, where genuine engagement and transparent communication trump high-pressure tactics. In a region like Silicon Valley, a data-focused, authentic brand is especially effective.
Neal shares an illustrative example of how he uses newsletters to provide real estate insights. By sharing an analysis report from Local Market Monitor on social media, Neal builds his data-driven brand, attracting investors who appreciate his expertise and candor.
Technological Mastery in Real Estate Investment
Leveraging AI and Automation: Neal’s strategies go beyond traditional methods. By integrating advanced technologies like artificial intelligence and automation into business operations, Neal has created an efficient, high-functioning system. For instance, his use of ChatGPT and Perplexity aids in content creation and organization, significantly boosting productivity. Neal’s ability to manage a substantial workload with just 27-28 work hours per week, supported by four full-time executive assistants, is a testament to the power of leveraging technology.
Optimizing Property Management
Grow Capitas: The Value Add Approach: Neal Bawa’s company, Grow Capitas, is dedicated to acquiring and improving multifamily properties rather than engaging in new construction. Neal’s approach involves a comprehensive optimization strategy employing a team in the Philippines and utilizing over 600 systems and processes. This ensures high tenancy satisfaction and financial efficiency, aiming for a 97-98% occupancy rate. Neal believes in long-term projects, focusing on sustainable improvements over typical five-year periods.
Creating and Sharing Educational Content
Educational Outreach: One of Neal’s cornerstone strategies is education. Through Multifamily University and platforms like Udemy, Neal provides valuable, accessible content that simplifies complex real estate analytics. His courses empower investors to make informed decisions, fostering a thriving community of educated investors.
Building Sustainable Investor Relationships
A Servant’s Heart Approach: Neal’s philosophy of building lasting relationships with investors rather than one-time transactions is central to his success. Both Neal and Jay Conner advocate for a slow and steady approach in business, focusing on genuine education rather than aggressive solicitation. Neal’s mantra involves creating opportunities and educating potential investors about them, rather than directly asking for investment.
Conclusion
A New Era in Real Estate Investment: Neal Bawa’s innovative strategies exemplify how data analytics, technological integration, and authentic branding can revolutionize real estate investment. By focusing on educational outreach and building genuine relationships, Neal sets a new standard in raising private money and optimizing property management. As the lines between real estate, PropTech, and FinTech continue to blur, visionaries like Neal Bawa are leading the charge toward a more informed, efficient, and profitable future for investors.
10 Discussion Questions from this Episode:
- Neal Bawa’s Background and Vision: How has Neal Bawa’s background in computer science influenced his approach to real estate investment and development?
- Raising Private Money: What key strategies did Neal Bawa and Jay Conner highlight for successfully raising private money without directly asking for it?
- Data-Driven Strategies: In what ways has Neal Bawa implemented data-driven strategies in his real estate ventures, and how has this contributed to his success?
- Building an Authentic Brand: Why do Neal Bawa and Jay Conner emphasize the importance of authenticity in brand building, especially in tech-centric regions?
- Technological Integration: How has Neal Bawa integrated technology, such as AI and data analytics, into his business operations, and what impact has this had on productivity?
- Investor Relations: Discuss the importance of building sustainable relationships with investors. How does Neal Bawa’s strategy differ from more traditional fundraising approaches?
- Mission 10K Project: What are the unique aspects of the “Mission 10K” project led by Neal Bawa, and how does it address specific market gaps in real estate?
- Educational Content: How does Neal Bawa’s commitment to providing educational content through platforms like Udemy and Multifamily University benefit his investment strategy?
- Social Media and Automation: How does Neal Bawa leverage social media and automation tools to manage his brand and investment outreach, and what are the advantages of this approach?
- Long-Term Versus Short-Term Projects: Why does Neal Bawa favor long-term improvements and developments over short-term projects, and how does this align with his overall investment strategy?
Fun facts that were revealed in the episode:
- Neal Bawa humorously predicts that “geeks” will inherit the earth, pointing to successful industry leaders as modern examples.
- Neal leverages artificial intelligence like ChatGPT and Perplexity to create and organize content efficiently, reducing his workweek to about 27-28 hours.
- Neal’s Mission 10K project aims to build 10,000 townhome rental units, filling the market gap between expensive homes and apartment living, with 1,000 units already under construction.
Timestamp:
00:01 Raising Private Money Without Asking For It
04:37 Built campuses, learned depreciation and benefited financially.
08:50 Custom graphics promote Indianapolis investment strategy.
10:32 Building authentic brand with affordable assistance.
15:52 Enjoy working with newcomers in private money.
17:15 AI boosts efficiency despite needing edits.
19:52 Efficient workweek with executive assistants enhances productivity.
27:19 Google Neal Bawa or Multifamily University online.
29:35 Tune in for more amazing private money insights.
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Leveraging Technology and Analytics in Real Estate Investments: Neal Bawa’s Methodologies
Jay Conner [00:00:01]:
Welcome to another amazing episode of Raising Private Money. I’m Jay Conner, your host, also known as the Private Money Authority. And this is the show where we talk about raising private money without ever having to ask for money. Here on the show, I have amazing guests join me, and today is no exception. I’ve got an amazing guest. He’s CEO and founder of not 1, but 2 commercial real estate investment companies. His companies use something very different, cutting-edge real estate analytics technology to source and acquire or build large commercial properties all across the US. Now the way he goes about funding this is from over 1,000 private lenders or investors. His current portfolio has over 4,400 units, and he has raised $325,000,000 in private money.
Jay Conner [00:01:24]:
Now what he does, he shares his team’s unique and cutting-edge real estate data methodologies to connect with data-driven investors. So if you’re a geek, you’re gonna wanna tune into this show. Who shares his vision? And what’s his vision? Well, that data beats gut feel by 1000000 miles. So over 10,000 real estate investors have taken his free real estate data analytics course on Udemy. His course on Udemy, again, is titled Real Estate Data Analytics, His course has got over 1,005 star reviews. In addition to that, over 5,000 investors have attended his multifamily webinar series each year, and hundreds of people have attended what he calls his magic of multifamily boot camps. Well, my guest believes that we are now at a turning point where traditional commercial real estate will combine with PropTech and Fintech technology disruptors and will truly reach its potential as a tradable, highly liquid assets class that will rival and eventually beat the stock market in its size and scope. In just a moment, you’re going to meet my special guest, mister Neal Bala, right after this.
Narrator [00:02:48]:
If you’re a real estate investor and are wondering how to raise and leverage private money to make more profit on every deal, then you’re in the right place. On raising private money, we’ll speak with new and seasoned investors to dissect their deals and extract the best tips and strategies to help you get the money because the money comes first. Now here’s your host, Jay Conner.
Jay Conner [00:03:16]:
Neal, welcome to the show, my friend.
Neal Bawa [00:03:19]:
Well, thanks for having me on the show, Jay. Very excited to be here.
Jay Conner [00:03:23]:
Absolutely. I’m excited to have you here because, Mylands, you’ve raised $325,000,000 in private money from, individual investors. We definitely wanna dive deep into how you’re going about that, your favorite ways to raise private money, and lessons learned about what to do and what not to do when it comes to raising private money. We’ve got 2 primary odds audiences here for this show, Neal. We’ve got real estate investors that are wanting to learn how to raise private money for their real estate deals. And then we have another part of our audience that just wanna be passive investors. They wanna be private lenders. They want to invest, and we’ll be able to talk about your syndication opportunity as well.
Jay Conner [00:04:05]:
But if you will take a moment, Neal, give us your backstory as to how you got to where you are now.
Neal Bawa [00:04:10]:
Sure. I’m a technologist, with a computer science degree. Data science is my major. And, I got into real estate in reverse. You know, most people get into real estate by buying a single-family rental or, you know, doing a rehab. In my case, I got into, real estate by building a campus from scratch in 2003. So I was, running a technology company, with 100 employees. We had lots of money, and we decided we didn’t wanna be tenants anymore.
Neal Bawa [00:04:37]:
So we built a custom campus for ourselves, You know, the founder, and the senior partner of the firm I was a junior partner, had a lot of construction experience. So he mentored me through the whole process, and it was a great learning experience. And we ended up building about 6 more campuses, by 2 2007. So between 2,032,007, we are building all of these campuses. And, I was a minor partner in some of them, and all of a sudden, I got exposed to the benefits of depreciation because I had the big fat tax salary, and I was in you know, I was working in Taxifornia. So for people like me with the big fat tax salary that are Taxifornians, it’s, very important to all of a sudden get these depreciation benefits, and how it affects your your income is just spectacular. And so that’s what pulled me into real estate by you know, with with all of the benefits that I was receiving from depreciation, all of a sudden, I had more and more money collecting in the bank. So, by the time I had plenty of money, it was 2008.
Neal Bawa [00:05:33]:
So my timing was incredible.
Jay Conner [00:05:37]:
I hear you. Yes. I got my wake-up call to the world of private money in, January of 2009 is when I got my wake up call. I’ve been relying on banks and just institutional lending, until I got cut off from the banks in January 2009. And so that’s how I got exposed to this world of private money. Well, you’ve raised a lot of private money here in your career. That’s right. So what are some of your favorite ways that you’ve gone about raising private money and finding investors?
Neal Bawa [00:06:10]:
I think the biggest thing that has worked for me is building an authentic brand, with the word authentic being the one that’s underlying, not the word brand. A lot of people build brands, but I find that they’re not necessarily authentic. So, you know, as somebody who’s a computer science graduate, as somebody who’s into data science, I felt that that was my strong suit. And I felt that given that I live in Silicon Valley with you know, if you if I throw a rock, it’s gonna hit a geek and bounce off and hit another geek. Right? This is just geekland. But there’s lots and lots of, you know, computer science graduates here and data scientists and, you know, lots of people that understand technology and numbers and exponential, you know, work. So I felt like I was in the right place. And so what I’ve done is I’ve worked very hard over the last, you know, 10-ish years to build an authentic data brand.
Neal Bawa [00:06:56]:
And I followed through on all of the different pieces of that, and I’ll give you examples of how anyone else could do it. Right? But I’m gonna start with an example that’s today’s example. So this morning, you know, when I wake up in the morning, I’ll spend an hour, hour and a half reading all of the newsletters that I’m subscribed to for real estate, and there are dozens of them. And I’ll pick one that has some interesting pieces of information. So this morning, I received a newsletter from a company called Local Market Monitor, and this is a company that ranks cities in the United States, for real estate investment. And it’s you know, I’m a multifamily guy, and this is a sort of a single-family thing. But from the perspective of brand building, it’s perfect. So a screenshot of Local Market Monitor was taken out of their article.
Neal Bawa [00:07:38]:
Right? And the article in the screenshot says best bets for 2,005, and this got us, you know, a list of cities, starting with Charleston, South Carolina. And then the next column says 3-year population growth and then job growth. Right? So now what I do is I take that content, and then I have a Slack channel, and the Slack channel is called marketing dash social dash posting. Right? So I have full-time staff doing this. So I go I throw that screenshot in there, and then I say the following words. A lot of people share information on their social, but what they forget is that they’re building a data-driven brand. So sharing something on social is not very powerful. Sharing it with your opinion is powerful.
Neal Bawa [00:08:18]:
So I’m gonna read off what I shared, right, on this. And I say in the Slack channel, Neal’s comments, and my team will post this on all social. Local Market Monitor has published their best bets market for 2025. Very interesting list. Terrific to see Charleston, South Carolina at the top of the list. Fantastic market. A lot of room to run. But I’m even more excited to see Indianapolis in 2nd position because a Republican victory in last week’s elections means tariffs being imposed on China, which means more manufacturing growth, and Indianapolis is one of the key markets that will see significant industrial growth.
Neal Bawa [00:08:50]:
I won’t read the whole thing, but you get the point. Right? What I’m doing is I’m taking content that’s come from sources that I like, and then I’m putting my spin on it, as to why all of a sudden people should be investing in Indianapolis, right, or things like that. And then I do this at least twice a day, 3 times a day, and I’m posting on, you know, LinkedIn. My team is doing all of this stuff using software like Hootsuite. And so they’re designing custom graphics. So the custom graphic that was designed was designed so that my picture was on the left. My quote about Indianapolis was at the bottom, and then the original source, that screenshot, was on the right. So now this is a custom graphic that was designed in about 10 minutes using AI and was posted on this channel.
Neal Bawa [00:09:30]:
I took a look at it. I commented. I don’t go on social. People think that I’m on social media all the time. They’re like, Neal doesn’t do any work. He must just spend 24 hours a day on social media. The last time I logged into social media was in 2014, 10 years ago. But what I do is I high I have a team of people.
Neal Bawa [00:09:48]:
Today, I have a team. When I started, it was just somebody on upwork.com from the Philippines that I was paying for 2 hours a day. Anyone can pay that $6 an hour for 2 hours a day. Everyone can afford it. Make that investment in yourself. And now, of course, there’s a, you know, huge team of, you know, people. About 10 people are doing investor marketing for us. But that gives you a sense of this.
Neal Bawa [00:10:08]:
Right? So I’ve been authentic to that data brand. I’ve created webinars. I’m doing a webinar tonight at 5 PM Pacific. I have, 1950 people signed up. About 400 will attend, about a 20% show rate. And that webinar is about the impact of the Trump win on commercial real estate and has 9 sections. So I talk about the impact on the dollar and the yuan. I talk about the impact of Bitcoin.
Neal Bawa [00:10:32]:
I talk about the impact of tariffs, blah blah blah. You know, is this good for commercial real estate? What about interest rates? What about treasury? So you notice that I’ve given you two examples, both from today, of how I am building an authentic data brand. I’m not suggesting that this is the right thing for everybody. But what I’m saying is that you’ve gotta be authentic, and you’ve gotta be continuously providing content. I hate social media. I don’t like going into any of those apps. So I just created a Slack channel, and I have people helping me. Right? And at $6 an hour for wonderful people in the Philippines, nobody can say I don’t have the money for people to help me.
Neal Bawa [00:11:05]:
Everybody has that much of an investment to make. Right? So brand creation and then brand elevation and continuously doubling down on that makes a huge difference because I have very geeky investors. They constantly send me content. So I think that I have the geekiest investors in America. Right? Silicon Valley people, computer science graduates. They work for companies like Google and HP. And that’s my niche because there are roughly 6,000,000 accredited investors in the United States. I need 1,000 of them to raise 325,000,000.
Neal Bawa [00:11:34]:
I don’t have any institutional capital. I have no family offices. I have nothing but these accredited investors. A 1,000 gave me $325,000,000. That’s all I needed. 1000 out of 6,000,000. So you can build an extraordinary niche that’s one out of a, you know, 100000 people that believe in what you believe in, and those are the best investors. That’s how I build my brand.
Jay Conner [00:11:58]:
So let me unpack, what you just said there. So what you’re doing, you and your team, is you are providing on social media amazing content about opportunities and what’s going on in the real estate investment world. And a result of that content is you’re giving great value. And I suppose that content, your subscribers, and the number of people that are following you and subscribing to your channel because of the great value continues to grow regularly. Is that right?
Neal Bawa [00:12:33]:
That’s right. We just hit our 10000th subscriber on YouTube. Instagram’s a huge channel for us, and, so is Udemy. So on Udemy, I create courses around real estate analytics. So right? So these courses are courses that basically, I’m taking real estate analytics, which is complicated, and dumping it down by giving people a bunch of Excel spreadsheets. Go in here for this city, plug in these data pieces of data, which are general knowledge, and then look at the result. And if it’s green, it’s good. If it’s red, it’s bad.
Neal Bawa [00:13:03]:
As simple as that. Right? So what I’m doing is I’m taking a complex topic that most people have trouble with, and I’m simplifying it. Right? So the course is called location magic. How to figure out the best cities in America to invest in. They don’t have to learn data analytics. They just have to follow a process that takes about 10 minutes to do. So, you know, you could go to a water cooler conversation for a, you know, Christmas party, and you could hear one person say, Rogers, Arkansas is a great city to invest in. Another person says, no.
Neal Bawa [00:13:30]:
No. No. No. No. Rogers, Arkansas sucks. It’s Charleston, South Carolina. Well, how do you know which one of these people is telling the truth? Right? Well, the answer is there’s gotta be some benchmark. So I create courses around that.
Neal Bawa [00:13:40]:
And those courses allow people to make investment decisions based on their water cooler conversations and their list of cities. And so each year, I get hundreds of people thanking me for somebody going and investing in Provo, Utah in 2016. By the way, Provo home prices have been up 3 x since then. And so they’re they love it. Right? And these people, they haven’t invested with me. The community is about 80,000 people. The total number of investors investors is 1000, 1,072 as of yesterday. But that’s okay.
Neal Bawa [00:14:08]:
That’s 1%. Right? So the 1% I’m monetizing, the others are simply getting value, and they’re going out and investing by themselves, doing whatever they want. And I’m perfectly happy with that because they’re also sending other people to me constantly to build my brand, so they help in some way or the other.
Jay Conner [00:14:25]:
What I hear you saying, Neal, is that you’re leading with a servant’s heart. You’re leading by providing amazing value and content. And so you and I have got that in common. When I was cut off from the banks back in 2009, and I couldn’t use institutional money anymore, and I started learning about private money, I made a decision, and it sounds like you made the same decision, that I wasn’t gonna go about asking people for money or chasing or begging or persuading or trying to talk anybody into anything because after all, desperation has got a smell to it. And the worst time, from my experience, to be raising private money and investor money is when you need it for a particular deal. But what I did, Neal, is I put on my teacher hat. So here’s my teacher hat and my teacher hat says, private money teacher.
Neal Bawa [00:15:17]:
Love it.
Jay Conner [00:15:18]:
When I started raising private money, I simply just took on the attitude and the philosophy of I’m not gonna try to pitch any deals. I’m first going to teach my opportunity. And, you know, I’ve got you’ve got a 1,072. All I have is 4, 7, 8 a half 1000000. That’s all I need for my single-family houses around here in my local area. And so the philosophy is the same. I started teaching people the opportunity. Do you know what’s interesting about my 47 private lenders? None of them ever heard of private money or private lending.
Jay Conner [00:15:52]:
I don’t think any of them even know what an accredited investor is, to tell you the truth, and none of them ever heard of self-directed IRAs. I love working with people who have never been introduced to this world of private money because when you do that, you get to make the rules. Right. One thing I had a hard time getting my mind wrapped around when I started was, you know, traditional borrowing is you go to the local bank or an institutional lender or a hard money lender and, you know, you get on your hands and knees and beg and put your hands underneath your chin and, you know, try to talk them into, you know, loaning you money. Wherein this world, I’m not asking for a mortgage. I’m offering a mortgage. I’m offering an opportunity. Would you say that you’re subscribing to all that same philosophy?
Neal Bawa [00:16:38]:
Very much so. I think that I find that there when you’re chasing money when you’re chasing investors and asking them and pushing them for money, you’ll get some. But I think that that that’s not the kind of relationship you wanna build. Maybe people will give you money once under pressure. But a business is based on recurring revenue and in this case, recurring investments. So you’ve gotta have people giving you money for the second time, the third time, the 4th time. And to do that, it’s better to take a slightly slower approach. In the in an over a 5 year time, you’d make, you know, 3 x as much money and do 3 x as many projects.
Neal Bawa [00:17:15]:
But maybe in the 1st year, you’ll be a little bit slower than that because you’re building a brand-based scenario. Right? All of the things that you just mentioned, Jay. I mean, those are all the things that have to be done and have to be done correctly. And it it takes less time less effort and less money now because of technology than ever used to. I use artificial intelligence to do tons and tons of things. So I have a 40-slide deck that I’m working on, and AI wrote all of the notes now. I always edit them because it doesn’t necessarily do a very good job, but it makes it much easier to edit something than to write it from scratch. When I create webinars, I go into, chat GPT 4 or per Perplexity.
Neal Bawa [00:17:56]:
These are my 2 2 tools. And I spend about 5 to 10 minutes talking to it. Just I turn on voice typing and I talk to it. I make mistakes. I said, oops. I made you know, I said this wrong. But I type talk for 5, 6, 7, 8, and 10 minutes straight, which is hard to do. That’s a massive amount of content.
Neal Bawa [00:18:13]:
And then I say, okay, chat GPT. Structure this. Then it structures it for me. And then I structure it for various purposes. I say, structure this for my PowerPoint designer. These are the kind of slides that I would like. These are the sections. These are the types.
Neal Bawa [00:18:26]:
It structures it. I copy-paste that into a Slack channel. My PowerPoint designer is now working on my deck. Then I say structure this for my marketing team and give them 3 email templates, and I write email templates based on the content that I’ve created. And I send those 3 templates off to them. Then I say, give instructions to my graphics designer to create custom graphics, and it does that. And I copy-paste it into a Slack channel for the graphics designer. These are all things that didn’t even exist 2 years ago.
Neal Bawa [00:18:53]:
So you should be able to accelerate your brand and create massive amounts of high-quality content in a tenth of the time that you could do before November 30, 2022. That was the date when Chat GPT came out. So as an entrepreneur, as somebody who wants to raise private capital, it’s much easier to do than it has ever been.
Jay Conner [00:19:14]:
I love it. Well, you have certainly tapped into a brilliant strategy, Neal, and that is leveraging the technology. And, and your your delegation reminds me of my father. My father is Wallace Conner. He’s 91 years old next month, and he’s in the middle of a 350 new home bill project. I wanna be like him when I grow up. But, yeah, he was known as the dictate, and that’s what you did. He’s known as the dictate, delegate, disappear man.
Jay Conner [00:19:46]:
So that’s what you’re doing. You’re dictating, delegating, and getting out of the way and letting that statement move.
Neal Bawa [00:19:52]:
I’ve measured the total amount of productivity that I have, but I don’t measure the total number of hours. So I’ve only worked about 27, 28 hours a week. I take, you know, you know, 6 weeks of vacations in a year, And I like that. So, you know, I’ll do my reading between 7 and 8, and I’m working from 8 to 2, and then I’m done. But what happens is I tell people I work about 200 hours a week, and they’re like, no one can work 200 hours a week. The answer is you can if you have 4 full-time executive assistants, and they’re all very busy, and they’re all doing very useful things. So if I spend, on an ongoing basis, 30 minutes a day asking my staff for data, for visual reports on capital raising. I have about 100 reports on capital raising.
Neal Bawa [00:20:41]:
Right? There are social media channels. There’s incoming lead flow. There’s, what are we doing with, email drip campaigns? How many people are coming into drip campaigns? Where are they on the drips? So we have about 13 emails that are dripped on people after they join us on some basis. Then, of course, there are, reports on whatever capital raises we’re doing right now. Right? So altogether, I have about 12 different reporting Slack channels, and those Slack channels have a maybe a total of 200 reports. This allows me to be extremely productive, and it allows people or it requires my people to be extremely accountable without working a large number of hours. Your systems and your processes define who you are. Right? My moniker in the industry is the mad scientist of multifamily.
Neal Bawa [00:21:29]:
Because when I present up on stage, I’m always showing people at least a dozen systems, And people are taking screenshots of those and copying them, and I’m pretty happy about that. Right? So Clattery is you know, the best form of, you know, the best compliment that anyone can ever get.
Jay Conner [00:21:46]:
I love it. So let’s move over and talk about the opportunities that you have, for people that may want to invest. What kind of projects do you have going on now, and what opportunities do you have?
Neal Bawa [00:21:58]:
Sure. So I run 2 different companies. 1 buys properties, value add properties, for multifamily. We dabble with other areas like self-storage and industrial, but our core is multifamily. And then the other area is where we build townhomes. We don’t build a single family. We don’t build apartments. We build townhomes.
Neal Bawa [00:22:17]:
Why? Because townhomes, in my opinion, are the missing middle. There are lots of great people building apartment complexes, and there are lots of folks like you and Lennar and, you know, KB Homes that are building homes. But the problem is the homes are too expensive. Even starter homes are too expensive. Only about 27% of Americans can afford the starter home that KB Homes is building today or Lennar is building today. Apartments are available, but have you seen the rent growth? I mean, the rents keep going up from time you know, all this time. And there’s a lot of people that don’t wanna go live in apartments. They don’t wanna deal with hallways.
Neal Bawa [00:22:50]:
They don’t wanna deal with people running up and down the hallways, the smell of marijuana, you know, a rottweiler biting your kid. They wanna live in a home, but they know that they’ve lost the race to buy a home. Right? So average home prices in the US are $416,000. In most cities that I like for investing in jobs, they’re over $500,000. The Phoenix is at 5.32. Austin’s at 5.36. So most people can’t even get the down payment done. And these days, the down payment is 20%.
Neal Bawa [00:23:19]:
It used to be 3%. We don’t get loans like that easily available these days. So people have lost that race, but they don’t wanna live in apartments. So one of my businesses just builds large townhomes for rental communities. So now nobody’s living above and below you. You’ve got a backyard. You’ve got a garage. Maybe not 2 garages, but one garage.
Neal Bawa [00:23:36]:
And then you’ve got you know, the other car is parked in the driveway or outside. And so you’re living in your own home, but you’re renting it. And so that project is called Mission 10k. We currently have 6, projects underway with 1000 units in construction. We’ve got $50,000,000 already invested in these projects. It’s it’s more high profit but higher risk. So what I did was I spent 3 years $20,000,000 optimizing the risk. So I optimize the risk.
Neal Bawa [00:24:04]:
So on a front-end basis, I don’t ask my investors to invest until I’ve already gotten to the point where the construction loan is signed. I don’t know of any other developer that does that because, usually, it takes, you know, a half 1,000,000 to $1,000,000 to get to that point. So I created a company that puts that money upfront. And whenever there are projects that go bad during that time, the company eats it. So no investor ever has to worry about that. But once the risk is done and the project construction loans close, then I bring the investors in. And now I’m able to accelerate their profits with that company. But there are lots of people who are like, no.
Neal Bawa [00:24:37]:
No. No. I don’t wanna invest in new construction. They invest in my second company, Grow Capital. And Grow what Grow Capital does is that it buys properties and improves them. And a lot of people do that. So the people are like, well, what is so special about you doing it? There are, like, 20 or 200 other guys doing it. My answer is an army in the Philippines.
Neal Bawa [00:24:58]:
So I own a company in the Philippines with an army of dozens of people. And these people, basically, for $6 an hour, follow 6, 700 different systems and processes to optimize my properties. They optimize everything from delinquency to leasing to, keep you know, making sure that my staff in the US is answering phone calls, you know, to doing hundreds and hundreds of different reports, to getting local grants for tenants, you know, in case my tenants fall behind. I gave you five examples, but there are 100 of them. And that allows me to keep my properties more full at higher rents than other people. It’s the use of systems and processes, 100 of them, for value-added properties. Typical value property is 200 units, and my goal is to keep them at 97, 98% occupied all the time. And every time I get to 98, I raise rents.
Neal Bawa [00:25:49]:
I fall back to 92. My leasing team comes in and generates massive amounts of leads. We boost it up to 98, and then we raise rents again. And we play this game for 5 years on a property.
Jay Conner [00:25:59]:
I was gonna ask about how long on average you stay in on a property. So it sounds like about 5 years before you sell or cash out. Is that right?
Neal Bawa [00:26:08]:
Yep. 5 years for value properties, and 4 years for new construction properties. So it we we don’t do a lot of short-term, projects. That’s not our forte. I think there are a lot of people doing short-term lending and good luck to them. They’re they’re doing well. I like to build things. I like to improve things.
Neal Bawa [00:26:26]:
I like to see the benefits of all the different things that my team and I are implementing. And so for me, there is a satisfaction that comes with spending years on a project.
Jay Conner [00:26:38]:
Makes a lot of sense. Well, Neal, you are an amazing human being with all the processes you put in place, leveraging technology, leveraging AI, and leveraging human talent all across the globe. I know we’ve got a lot of listeners here to the show who want to learn how to follow you, how to get in touch with you, how to get on your webinars, and how to learn about, where to invest in the United States. And we’ve got a lot of people that would be interested in being a passive investor with you as well. So what are some of the ways that people can follow you on social and learn about investment opportunities?
Neal Bawa [00:27:19]:
Well, I’m very lucky to be the only Neal Bawa with this spelling on the World Wide Web. So everything you need to read about me on the web, good or bad, is about me. There’s no other Neal Bawa that I’m aware of. So the best way to find me is to just type my first name, and last name into Google. Another way, if you’d like to get involved with our webinars, like the Trump webinar that we’re doing tonight, is to go to Multifamily University. So type the words Multifamily University into Google, and you’ll it’ll take you to a site called multifamilyu.com, where you’ll see our archived webinars. And you’ll notice that even though the website is called Multifamily University, the webinars are about all kinds of things. Our latest webinar is about Airbnb.
Neal Bawa [00:27:57]:
Our next webinar is about how industry, will need to be rebuilt in the United States because of everything that we’re doing with bringing manufacturing jobs back to the United States. So you know, a multifamily university is probably the best place. Now if you’re a data geek and you’d like to see how I use data, go to Udemy, that’s www.Udemy.com, and search for my name, and you’ll see my course. Right now, I have 14,000 geeky people taking my analytics course.
Jay Conner [00:28:25]:
So for those of you who are listening, to follow Neal, simply Google his name, Neal Bawa. You can also find his course on Udemy. I have courses on there as well. And, also, for the webinars that he’s doing, go to www.multifamilyuniversity.com, and you’ll get amazing free content and education there. Neal, thank you so much for, coming on here with me, and any farewell or parting words before we call this show a wrap.
Neal Bawa [00:29:03]:
I’d like to just share the one true saying that I’ve created myself, and that is that the Bible got it wrong by one letter. The Bible got it wrong by one letter because it is not the meek that shall inherit the earth. It’s the geek. It’s the geek. The richest man in the world, geek. 2nd richest, geek. 3rd richest, geek. You see a pattern there, Jay?
Jay Conner [00:29:27]:
Yeah. There is a pattern. There is a pattern. Thank you so much, Neal. God bless you. Thank you for joining me.
Neal Bawa [00:29:33]:
Thanks for having me.
Jay Conner [00:29:35]:
And there you have it. Another amazing, like, triple amazing guest that I had here on today’s show on Raising Private Money. And I appreciate you joining us. We always appreciate you, sharing, liking, subscribing, and reviewing. If you happen to be watching on YouTube, be sure and subscribe and click that bell so you don’t miss out on any more amazing episodes coming up. I’m Jay Conner, the private money authority, wishing you all the best. I look forward to seeing you right here on the next episode of Raising Private Money.
Narrator [00:30:11]:
Are you feeling inspired by the knowledge you gained in this episode? Then head over to www.JayConner.com/Moneyguide. That’s www.JayConner.com/MoneyGuide and download your free guide that shares seven reasons why private money will skyrocket your real estate investing business right now. Again, that’s www.JayConner.com/MoneyGuide to get your free guide. We’ll see you next time on raising private money with Jay Conner.
