This episode features a special guest who has raised over $37 million in private money! As the founder of Techvestor, Sief Khafagi is passionate about helping professionals gain amazing returns by passively investing in short-term rentals. Techvestor utilizes data-driven technology to analyze 100,000 properties per month, which allows the team to identify which property deals are the most promising.
So if you’re interested in real estate investing but don’t have enough time to handle the ins and outs of being a property manager, Techvestor might just be perfect for you! With as little as $25,000, you can invest in Techvestor’s growing portfolio, which currently sits at over 100 properties across 12 different markets.
Tune in as Sief, and I discuss the winning mindsets to raising private money that you can use to earn amazing returns each quarter! Learn how to attract private capital and how to actually begin conversations with potential lenders. This episode has nuggets of wisdom that are a must-hear for anyone looking to achieve financial independence through private money and real estate investing.
Key Takeaways:
- “Don’t reinvent the wheel, but drive differently.”
- How to start conversations about raising private money
- How to actually find private capital
- How pivoting can help you in the long run
- On finding a niche within a niche
- How Techvestor’s technology can find the best possible deals
- How to find a team that can actually help you see results
- On how technology will transform the real estate space
Check out my book: 7 Reasons Why Private Money Will Skyrocket Your Real Estate Business and Help You Build Incredible Wealth!
Get it here for FREE: www.jayconner.com/moneyguide
Connect with Sief
LinkedIn Page: https://www.linkedin.com/in/siefkhafagi/
Twitter Handle: siefkhafagi
Timestamps:
0:01 – Raising Private Money with Jay Conner
1:05 – Today’s Guest: Sief Khafagi
3:19 – The Mindset To Raised Billions Of Dollars In Private Money
4:53 – Don’t Reinvent The Wheel But Drive Differently
7:07 – Effective Ways To Attract Private Money
8:37 – Jay’s Free Money Guide: https://www.JayConner.com/MoneyGuide
9:21 – The Discovery Of Techvestor
12:46 – How Do You Underwrite Over 50,000 Properties A Month?
15:48 – Why Invest Passively In Short-Term Rentals Through Techvestor
19:43 – Invest In https://www.TechVestor.com
20:34 – Does Techvestor Use AI To Predict Data?
22:16 – How To Grow Your Dream Team & Find Great Talent?
24:17 – Sief Khafagi’s Parting Comments: Go Out There And Raise Private Money It’s Out There. Go Do! You Will Never Know How Far You Can Get Without Doing!
Raising Private Money For Short-Term Rentals – Real Estate Investing Minus The Bank
[00:00:00] Sief Khafagi:
So we were a niche within a niche, within a slice, as you call it. But these asset classes were incredibly hard to do yourself. So we tackled a lot of the pain, right? Most people don’t wanna just be a landlord, but in Short term rental, they have to be a landlord cleaner. They have to manage to price, they have to deal with guests, and they have to deal with children pissing on walls. It happens. You’d be surprised. So we took all that, packaged it up in a way, and said, Would you be interested in investing in something like this if it was done for you? And the short answer to a lot of people was yes. And the short answer really was yes to us because we were that out ourselves.
[00:00:34] Narrator:
If you are a real estate investor and are wondering how to raise and leverage private money to make more profit on every deal then your and 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.
[00:01:02] Jay Conner:
My guest today on raising private money has raised 37 million for real estate deals. How in the world did he get to that point? He actually is an ex-tech. He turned. Real estate investor. In the meantime, he’s helped thousands diversify into real estate, and this was after spending almost five years at Facebook where he built the second-largest engineering organization in the world.
[00:01:29] Jay Conner:
Well passed a little bit of time. He’s only hired over a thousand people, a thousand hires later. And then he had the epiphany, A company’s most important asset is its people. He is the founder of a company called Tech ve. And what Tech VE does is it help real estate investors and busy professionals invest passively in this emerging asset class that I know you’ve heard of called Short-Term Rentals.
[00:01:58] Jay Conner:
Such as Airbnb and the like and build for their lifestyle. So all investors get to use the properties that they invest in that are associated with tech investors and they get some pretty nice returns as well. And I know you want to hear about that. Tech investors, and advisors include people and folks and companies such as Air aird realtor.com, and bigger pockets.
[00:02:22] Jay Conner:
But this isn’t your average real estate investment company. Tech investors built their own proprietary sourcing technology where it can actually underwrite. Listen at this, over 50,000 properties a month, and acquire the best ones for its investors just like you. So if you’re looking to raise private money for your real estate deals, We’re gonna have that conversation in just a moment.
[00:02:48] Jay Conner:
And if you’re interested in also passively investing, you’re gonna learn about that as well. You’re going to meet my fascinating guest, Sief Khafagi right after this.
[00:03:09] Jay Conner:
Sief, I’m so excited to have you on the raising private money podcast, and I must say for someone such as yourself at the ripe old age of 18 years old, you must have really a different kind of mindset than most people have when it comes to attracting private money. So my first question for you, Sief, is. What kind of mindset does an individual have to have in order to attract, something like 37 million in private money?
[00:03:40] Sief Khafagi:
First and foremost, thanks for having me on the show. And the mindset of Not so 18-year-old anymore these days. We wanted to be different really in every way. We wanted to build an advantage in the space. That’s why we built our own technology. We automated also predominantly focus, on experience.
[00:03:59] Sief Khafagi:
That’s a big area where. People forget. And that’s really where we, that’s the mindset we were in. We were an investor. What did we wanna see? How did we wanna see it? What kinda information did we wanna learn? And what kinda experience at the end of the day, whether it’s five from the mindset we ourselves in? And that’s the mindset ourselves.
[00:04:23] Jay Conner:
Very good. See here on the Raising Private Money Podcast. We talk with new real estate investors and seasoned real estate investors that are looking to raise private money or raise more private money, and we also talk with our audience about becoming passively involved as an investor as well.
[00:04:42] Jay Conner:
Let’s start out our conversation first. With giving it advice from your experience, say to a new real estate investor that wants to attract some private money what advice would you give them from your own experience on how do you start, where do you go out, how do you start conversations on attracting private money?
[00:05:02] Jay Conner: And of course, we’re not talking about institutional money. We’re talking about doing business with individuals that are looking for a high rate of return safely and securely, but to be passive, where do you go find these people and start the conversation? I think the first thing really is in your offering, right?
[00:05:19] Sief Khafagi:
You wanna be able to a saying that I heard from a mentor a long time ago is, don’t reinvent the wheel, but drive differently. And for us, we are one of the institutional-grade short-term rental operators in the country that is vertically integrated. So by nature, we looked and felt differently because we were in an asset class that not a lot of people know or understand very well just yet.
[00:05:44] Sief Khafagi:
And secondly, our team was driven by technology and data, and software. If you go to our website compared to any other syndicators type website, they look and feel completely different. In fact, many people compare our website to that of a tech product rather than a syndication company. And then, tie that into your why, right?
[00:06:03] Sief Khafagi:
Everyone and their mother wants to go raise money. For a real estate deal and they all wanna buy a multi-family building or an office building or a single-family home and flip it and that looks and feels the same, right? We get disinterested as repetition continues. And you have to find a reason to separate yourself.
[00:06:22] Sief Khafagi:
So that could be your asset class, that could be your why, it could be your structure. It could be your team. It could be the way you look on, your website and how you feel and who you attract, the avatar community that you tackle. But riches are in the niches, and I know you know that quite well, Jay.
[00:06:37] Jay Conner:
That’s for sure. One of the, obviously today, one of the ways that tech VE attracts. Private capital is being a guest on a podcast, just like sure. On my podcast. But when you started out, what are some of your, other than being on shows and being on guests, what are some other ways that are your favorite ways to attract private capital?
[00:07:00] Sief Khafagi:
The first one’s gonna sound a little obvious, and it’s to solve a problem, solve the biggest pain point. When we first started, we were actually a software product, and we attracted some people, but we didn’t attract enough people to really be in business and we, it’s because we weren’t solving the right problem.
[00:07:16] Sief Khafagi:
So next about 60. We continue to pivot our offering and pivot our pain points that we were tackling until really we gotta a point where we understood our avatar and the type of investor and we raised about 7 million in the next 30 days. So that was our first aha. That’s the moment. These are the 1, 2, and 3 things that we wanna hit.
[00:07:35] Sief Khafagi:
To solve, understand what to solve for, and what pain point you’re solving for your type of avatar. This is the biggest point where you come a little bit from solving. It’s gonna be really hard to get them into an in-person meeting on a Friday afternoon when they got kids and family at home. So you gotta be able to adapt, right?
[00:07:57] Sief Khafagi:
Is it a team? Is it ads? Is it podcast shows? Is it one too many? Is it one-to-one? Is it social? Everyone has their channels. I encourage people to not focus on every channel but rather focus on the channels that matter most to their avatar.
[00:08:09] Jay Conner:
Excellent advice, Steve. Before we get into the subject of your big focus right now today, that being Tech Vest, I wanna give everybody a gift for just being right here on the show with us.
[00:08:23] Jay Conner:
And I just recently wrote this, seven Reasons. Why private money will skyrocket your real estate business and help you build incredible wealth. If you’re looking to raise private money very quickly for your real estate deals, you can download it for free at www.JayConner.com/MoneyGuide.
[00:08:57] Jay Conner:
Let’s move on over to Tech Investor. How did you come up with the idea? This is like a niche of a slice of a pie.
[00:09:06] Sief Khafagi:
That pie is very tasty and Sabrina and I, we’re the two co-founders. We were intact at the time. And we stayed in a bunch of really poorly ran and operated Airbnbs.
[00:09:18] Sief Khafagi:
I spent time hiring and recruiting a lot of people. And when you hire people, you’re not just hiring ’em to a company, they’re oftentimes relocating to the city of Boston, for example, and they are working at your company, but also they’re moving to a new city. So where they sleep, where their kids are gonna go to school, you’re opening up a new city.
[00:09:34] Sief Khafagi:
And when we were there, we stayed in a bunch of Airbnb. Sabrina was developing AirPods and built the first AirPods product line and took that to market. So from an operations and logistics and design perspective, she was really fantastic. And for me, it was really about recruiting a lot of great talent and technology.
[00:09:50] Sief Khafagi:
And these people that we were recruiting, they really just. Did not have great experiences in the short-term midterm rentals neither ourselves. Why has
[00:10:05] Sief Khafagi:
LPNs just really tackle Airbnb? So we said what if we could, what if we could make it as easy as investing in an apartment building these days? And you and I understand a little bit about syndication, but Broad actually calls.
[00:10:23] Sief Khafagi:
But these asset classes were incredibly hard to do yourself. So we tackled a lot of the pain, right? Most people don’t wanna just be a landlord, but in short-term rental, they have to be a landlord, a cleaner. They have to manage to price, they have to deal with guests, and they have to deal with children pissing on walls.
[00:10:39] Sief Khafagi:
It happens. You’d be surprised. So we took all that, packaged it up in a way, and said, Would you be interested in investing in something like this if it was done for you? And the short answer to a lot of people was, yes. And the short answer really was yes to us because we were that ourselves.
[00:10:59] Jay Conner: Explain exactly what a Tech investor is. So first of all, does tech, ve is that the investing arm of your company, or does tech actually own the properties? What te give us more detail about tech VE itself.
[00:11:15] Sief Khafagi:
Yeah, so Tech VE is our technology platform and our main company or main holding company, for lack of a better word.
[00:11:23] Sief Khafagi:
Each year we start a new fund where we invite limited partners to invest alongside us, the general partners, into a portfolio, of short-term rentals that are found, operated, and run by our team. So we are, the GPS investors are the LPs. We’re a very traditional gp, LP structure for those who are familiar with the real estate world.
[00:11:42] Sief Khafagi:
But our technology is housed within the tech investor infrastructure, which allows us to really infinitely scale. That’s a huge advantage of our offering, our business. We’re not in just one market and we don’t just own one or two properties in a single market. Today we own a little over properties, across markets.
[00:12:02] Sief Khafagi:
A lot of that starts with a lot of great technology and of course a ton of incredible people behind the scenes.
[00:12:08] Jay Conner:
You just answered my next question, and that is how many short-term rentals do you have? And if you’ve got over a hundred, of course, your background is a technology, so there’s just no way that a company can manage over a hundred properties, particularly.
[00:12:25] Jay Conner:
In this short-term rental space, unless you have got an amazing team amazing management, amazing people-finding skills and the such yeah, my kudos are to you. I, have been in this industry, real estate investing. For 20 years. And of course, Airbnb and short-term rentals really started emerging, I don’t know, four or five years ago is when it really started to get, all the buzz talk.
[00:12:54] Jay Conner:
And you’re the first company I’ve heard of that’s really figured out how to scale it. This leads me to my next question. How do you underwrite over 50,000 properties a month? And of course, just to make sure everybody understands my question when I say underwriting, I’m assuming what that word means Steve is to figure out if it’s a good deal or not precisely, and you would be very accurate on that, and that’s exactly why we built it.
[00:13:23] Sief Khafagi:
Fun fact and I’ll give you some real-time updates here as we’re recording this in April today we actually underwrite over properties per month with our recent push on our update. We’re tracking over local markets. And in short, exactly as you mentioned, the property hits the open market. We know about it within seconds.
[00:13:45] Sief Khafagi:
And we’re able to underwrite it by pulling in data from a lot of both, a lot of places, both public and private data, and complementary data, right? As well as data that disagree with each other so we can get the whole scope of things. And it goes through an underwriting algorithm that tells us, Hey, does this deal work or does it not value?
[00:14:03] Sief Khafagi:
And the reason this matters to us is because for us to go buy and identify a hundred or hundred thousand properties, we’re looking at, roughly 50 to a hundred times those properties. And before we identify the homes, we’re gonna buy out a hundred thousand properties. We underwrite maybe just maybe 1500 to 2000 of them.
[00:14:27] Sief Khafagi:
Actually, fit our buy box of what we might be looking for. And that’s before you get to the artful side of real estate, what does it look like? What do the bones look like? Where is it? There are things that technology and data can’t tell you exactly, and that’s the human side of real estate. But we’re able to, accomplish about 96 to 98% of the job on the number side before we waste anyone’s time.
[00:14:47] Sief Khafagi:
And that’s a big reason that we don’t charge. Export fees on, typical asset management fees, and things like that. Cause we’re an incredibly lean and tech-driven organization. That’s amazing.
[00:14:57] Jay Conner:
So why would someone be interested in, say, passively investing with your company and these short-term rentals versus, All the other commercial stuff, self-storage apartments, and small apartments?
[00:15:15] Jay Conner:
Of course, we know why nobody’s investing in office buildings these days. But anyway, com comparing and contrast other commercial properties or single family. Airbnbs, a lot of those are single-family that, you’ve converted into this commercial asset class.
[00:15:34] Jay Conner:
Why short-term rentals over other stuff?
[00:15:37] Sief Khafagi:
I think the first and foremost thing is a portfolio is probably the best option for most.
[00:15:53] Sief Khafagi:
But we’re incredibly bullish on short-term rentals for a couple of reasons. First and foremost is cash flow, right? We believe in investing in income and in income, and Airbnb is one of the highest if not the highest yielding. Secondly, the lack of competition in the industry is massive, right? In commercial, multi-family, if you mean competing against BlackRock, Blackstone people who every rental.
[00:16:27] Sief Khafagi:
Mama Joe and Grandpa Bob down the street have some IKEA furniture in a room and calling him an Airbnb and really cocky with making a couple hundred bucks in cash flow a month. The arbitrage opportunity is incredible, right? Cause they’re not really looking at it like a business. And lastly, you brought up, a really important point, which is we are buying single-family homes based on value and operating them and selling them eventually based on revenue.
[00:16:54] Sief Khafagi:
Which is an arbitrage and a development in itself without actual development. In fact, we see development-like returns without taking development risks, right? In addition to significantly better cash flows during the whole period, right? If you compare multifamily, which might be a great deal, you’re rarely ever gonna hit that.
[00:17:12] Sief Khafagi:
In the deal, because it’s not a cashflow focus investment, you’re gonna get about much more.
[00:17:31] Jay Conner:
That does set you apart. A lot of private investors, private lenders that got, get involved in a project, a lot of times, even on a, a preferred return, they’re not seeing anything like till three years down the road. But with your Airbnb model or short-term rental, you got cash flow and income coming pretty much at the beginning.
[00:17:54] Sief Khafagi:
Oh yeah. Our first distribution usually happens within, we tell investors in roughly about six months. And, when you look at our trailing, I think it’s about 242 months of history at this point across all our portfolios. They’re rough, we’re above an eight to a 12% cash on a trending basis. Typically almost all the time.
[00:18:12] Jay Conner:
That’s fantastic. 8% or 12%. And my next question is going to be about building a team and also. Wrapping up with the topic of ai, which is all the buzz these days. It’s amazing what has happened in the past five months. Oh, absolutely. Mind-blowing. And I haven’t had a guest on the podcast raising private money that would be more qualified to talk about AI than you yourself.
[00:18:38] Jay Conner:
But before we get to that topic, please go ahead and share with everyone how they can learn about how to invest in and become passive investor in your company and learn more about it.
[00:18:49] Sief Khafagi:
Yeah, so if you’re an accredited investor and you’re looking to diversify into short-term rentals, or it’s something that piques your interest, you’re more than welcome to head over to tech.com, request an invite, chat with someone on our investor relations team, review the materials, make sure it’s a good fit for you.
[00:19:06] Sief Khafagi:
And if everything checks out, we’d love to have you as, an LP here in our second fund where we’re targeting in that 50 to hundred million range and repeating the success of our first fund.
[00:19:17] Jay Conner:
That’s awesome. So that website is www.TechVestor.com of course that will be in the show notes as well.
[00:19:30] Jay Conner:
So AI is all the hot topic, artificial intelligence chatGPT, open ai, all that stuff. And now, my guess is You’ve probably written your own ai. I’m in a mastermind group that I was with last week and this guy and his team, they got their own AI going on. So anyway. Are you using AI in your company?
[00:19:53] Sief Khafagi:
I wouldn’t go as far as to say we’re using a chatGPT as AI. But we do have our own machine learning models and learning models in general that act behind the scenes that allow us to forecast price better understand what our future expenses may look like based on seasonality, based on trends, and predict based on the market if we don’t actually have that data.
[00:20:15] Sief Khafagi:
So we actually do run some complex learning models in the background. Therefore, we can better operate, right? And we find that our costs to run and operate a property property management fees included, typically run about 50 to 80% cheaper than if you were to go higher, your traditional property manager in the space.
[00:20:31] Sief Khafagi:
And a lot of it happens to be because we use a lot of technology and tooling behind the scenes with a lot of learning models that allow us to guide us. Where we go. But we are heavily focused on building a human-driven environment with the help of technology rather than the opposite of having technology replace humans.
[00:20:49] Jay Conner:
And I appreciate that because there’s a lot of talk out there about it. What is the future? We know what Elon Musk and the rest of ’em are saying these days. Put 4.0 on pause, put 4.0 on pause. Anyway, so I wanna wrap up this discussion and this topic and that is on building a team. How big is your team at Tech Vestor and what’s your advice on growing a team and finding talent?
[00:21:15] Sief Khafagi:
So our global team is about 30 people all across the country and across the world. And our leadership team is roughly about eight to 10 people. The biggest advice I can tell you is don’t be cheap and hire the. It’s a big thing that I saw at Facebook firsthand, and really, I think anyone who’s really experienced a ton of success in their life will tell you it’s not because of the product necessarily or the company.
[00:21:39] Sief Khafagi:
It’s because of the people who are building the product and leading the company. And so for us, we’ve made an incredible investment in our humans hiring the best people. They were selected, recruited egg hunted. Specifically for their role. And it’s something that’s a big deal to us, to have the best possible people on our team, dealing with our infrastructure, growing our infrastructure, and navigating problems.
[00:22:02] Sief Khafagi:
I can’t stress this enough, especially in the syndication space. Having an incredible team to navigate problems, changes, whatever your investment thesis is, one day is not where you end assures.
[00:22:24] Jay Conner:
Believe it or not, Steve, you just got a shout-out from Elon Musk on YouTube. He’s right there in the chat and Elon says, thank you, bro. I think he’s saying thank you, bro, for the hiring of humans.
[00:22:34] Sief Khafagi:
I would imagine.
[00:22:37] Jay Conner:
Oh, so that’s great, Sief. This is, this has just been amazing to have you on here.
[00:22:42] Jay Conner:
I respect you so much. For what you’re doing, and particularly your values, your core values, and your ethics as to how you’re out to, not just to make a buck, but to how it be a win-win for everybody on your team. Final comments before we wrap up Raising Private Money.
[00:22:57] Sief Khafagi:
First and foremost, thanks so much for having me, Jay, and thanks for those really courteous comments there as well.
[00:23:04] Sief Khafagi:
Anyone who’s out there thinking about raising private money, it’s a, it’s out there. Go get it. Differentiate yourself. Listen to this podcast. And there are a ton of episodes here that Jay spits a lot of value. Go do it, you’ll find that 99% of people just simply don’t do it. And how far you can get by just doing.
[00:23:21] Sief Khafagi:
Get out there, give it a shot, and come compete. We want some competition. Bring it on.
[00:23:27] Jay Conner:
You got it. There you have it, my friend. Thank you, my audience and followers for tuning into another episode of Raising Private Money. A great time to have Elon Musk right here on the show with us today, and I’m here to serve you, my friend.
[00:23:44] Jay Conner:
It’s all about raising private money, creating win-win scenarios, and I’ll leave you with this. I need your help. I really would appreciate a subscribe alike. If you’re watching on YouTube right now, make sure and click that bell so you don’t miss any more of the upcoming, amazing episodes of Raising Private Money.
[00:24:03] Jay Conner:
I’m Jay Conner, your host. Also known as the Private Money Authority. Wishing you all the best to take your business and your personal life to the next level. And we’ll see you right here on the next Raising Private Money with Jay Conner.
[00:24:20] Narrator:
Are you feeling inspired by the knowledge you gained in this episode? Then head over
www.JayConner.com/MoneyGuide. That’s www.JayConner.com/MoneyGuide and download your free guide 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 www.JayConner.com/MoneyGuide.