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REI Network: Smiling Investor’s Positive Attitude Yields Big Profits

 

Click here for Episode 27: Smiling Investor’s Positive Attitude Yields Big Profit >

Smiling Investor’s Positive Attitude Yields Big Profits

In this episode, Vinney Chopra, an engineer, real estate investor, broker, motivational speaker and dedicated family man from Northern California, shares insights into how he came to the US with $7 in his pocket and built a real estate empire of over $120 million.  He also discusses how he created a money-making machine with the capability of raising $7 million for new properties in just 24 hours.

 

What You Will Learn

  • How a positive attitude will help you weather any storm as a new investor
  • The importance of finding properties in “emerging markets”
  • How you must be willing to “take what you can get” on first purchase financing – until you can create a track record for yourself
  • How honesty and transparency are of key importance in fund raising
  • Saving valuable resources by employing “virtual assistants”
  • The “3 Key Investment Success Factors”
  • The critical importance of vetting and selecting the right partners

 

About Our Guest

Vinney Chopra is a Mechanical Engineer, but after graduating from George Washington University, Washington D.C., and finishing his Master’s in Business Administration in marketing, he shifted his focus to sales, marketing and motivation, becoming a motivational speaker. Vinney and his wife started real estate investment investing in 1983, becoming a broker in California and started buying single family homes and multifamily units in Texas, California, Arizona and India.  Over the last seven years, he has been president of a multifamily investment company— The Ideal Investment Group—which has acquired and is presently managing assets worth approximately $60 million.  He recently established Moneil Investments Group with assets at $57 million.

In addition to real estate investing, Vinney has been a professional fundraising consultant, business coach and motivational speaker for over 35 years.  He has given over 10,000 speeches and seminars on fundraising, positive thinking, enthusiasm, goal setting, and balanced living.

He travels and gives live presentations and webinars on Wealth Building. Creating Wealth with Multifamily Investing, Value-Add Win/Win Negotiations, Emerging Markets, Market Cycles, Economic Funding, Commercial Properties Analysis, Due Diligence, Investing in Multifamily and the Art of Raising Private Money.  Vinney is married to Kanchan, has 2 children, Neil & Monica, and lives in Danville, California.

 

More about Vinney

  • Born in New Delhi, India
  • Wanted to be an engineer, got job as an engineer but was more of an extrovert and had a heart for business
  • Came to US with only $7 to get an MBA and focus on marketing
  • Got job with marketing/fund raising company and worked there for 40 years, retired last year
  • Seasonal job allowed him to get real estate broker’s license but didn’t like working weekends with open houses and wanted more freedom
  • Transitioned into commercial real estate – multifamily
  • Started researching training courses, found David Lindahl – purchased educational materials, attended seminars and paid for coaching
  • His positive attitude and enjoyment of his new focus helped him be committed to success
  • Purchased 8 properties in the last 16 months!

 

First Investment Property Purchase

  • Living in Northern California
  • Purchased first property during 2007-2008 crash
  • Looked for smaller unit buildings for 9 months before first purchase
  • Found emerging market in Odessa/Midland Texas area with lowest jobless rate of 3.42, small towns with lots of jobs
  • Looked in LoopNet.com, called brokers in the markets of interest, asked for off-market deals
  • Purchased two buildings in the same week – 14-units apartment and 109-unit apartment with 101 storage units and small commercial building on 2.33 acres
  • Used to be hotel
  • Hailstorm occurred during closing and seller put on new roofs
  • Looked at population within 3 mile radius for storage units
  • Held for 4 ½ years
  • Had no money
  • Without experience, lenders not too interested
  • Approached seller to see if they would help finance the deal. Said “no” at first but later agreed
  • Vinney wanted to put 20-25% down –seller wanted 40%
  • Had to raise $1million for down payment
  • Vinney’s attorney created the promissory note for seller financing — mortgage at 6% first year, 7% next year, 8% next year, 9% next year

 

Investor Tip from Vinney

  • com– Great resource for virtual assists
  • Needed graphic designer for logos, brochures. Etc.
  • Found inexpensive graphic designer in Philippines
  • $50-100

 

Some Notes on Raising Money

  • Got property first, then started raising funds
  • Friend who was going to lend to Vinney asked what his “track record” was and Vinney said “zero”
  • Friend appreciated his honesty and increase $60,000 and later increased to $125,000
  • Ended up raising $1.5million from multiple investors
  • Took 45 days on due diligence (today – 21 days because he has a team to move quickly)
    • Note on due diligence:
      • Has inspector check out every single unit
      • Always does video sewer line probe to make sure pipes are clear and in good shape
    • Worked close with syndication lawyers (Gene Trowbridge and Kim Taylor) during this time
      • Notes on syndication process:
        • You need good partner
        • He has done 19-20 syndications to date
      • Held “fundraising” luncheons with potential investors to raise funds
        • Must adhere to strict SEC regulations governing these types of meetings
        • If you pool funds from 2 or more people, you need to syndicate
        • His motivational speaking helped at these events
        • Sent invitations to investors in Bay Area
      • Investors 40-70 years of age are looking for the high yields available in sound real estate investments
        • 8-9%
        • Plus equity share
        • 18-24% with equity
        • Hold funds 4-5 years

 

Biggest Mistakes

  • Choosing the wrong partners can hurt you for a long time
    • Must be trustworthy
    • Bad partners can hinder you
    • Non active partners can increase burden on you
  • Didn’t have much control in first partnerships and people took advantage of that
  • You need to have third party audits
  • Had problem with property managers
    • Took money from tenants
    • Didn’t post expenses in financial software
    • Pocket tenant money
  • When you get good people – reward them!
  • Buying a property is like a marriage
  • Key areas you MUST do well:
    • Due diligence
    • Exit strategy
    • Lenders involved
  • $9.7 million property, built in ’73-78, in B+ emerging market neighborhood
    • Hired local guy to do inspection and didn’t do video camera through sewer lines

 

Three Key Investment Success Factors

  • Investors
  • Acquisition/Due Diligence (inspectors, lenders, legal)
  • Property Management

He has improved his success by creating companies within his companies to control some of these areas

  • Moneil Investment – Investors & Acquisition
  • Moneil property management – Manages all properties

 

Biggest Success

  • Created Ideal Investment Group in 14-16 months, which should have taken 5 years.
  • Also, established Moneil Investment Group (name taken from his kids – Monica and Neil)
  • Both Ideal IG and Moneil IG have strong investor pool that allow him to literally raise $4-7 million dollars in a very short time – usually 24 hours.
  • Vinney created this “money-making machine” starting out with no funds of his own and a commitment to not ask friends and family to invest

 

Advice to People Starting Out

  • If you have limited money, you can invest in and reposition, starting with small single family homes up to 12 units and grow from there
  • Or, if you are not interested in doing all the work involved in finding, vetting, purchasing and managing properties, then they can invest in someone else’s properties and yield a minimum of 8%. Later, they can leverage this experience as a very passive “equity partner” investor to purchase properties.

What Does He Look Forward to in His Current Business

  • Finding/researching new emerging markets
  • Discovered Houston market early on and it has been very successful (#4 in the US)
  • Also discovered North Dallas (Frisco, McKinley, Plano, Carrollton areas), North Carolina “tech triangle,” north Atlanta
  • Can he help more seniors to enjoy their lifestyle by careful asset management and making good investments

Rap-It-Up

Target Market Insights With John Casmon, Episode 18

 

Click here for Episode 18: From $7 and a Smile to $200 Million with Vinney Chopra >

From $7 and a Smile to $200 Million with Vinney Chopra

Vinney Chopra came to the U.S. from India with $7 in his pocket, and now he can raise $10 million in a day or two. Known for his friendly and engaging personality, Vinney has earned the affectionate nickname of Mr. Smiles. As a multifamily sponsor he has facilitated over 26 successful syndication deals and manages a successful real estate investment portfolio worth over $200 million. On this episode of Target Market Insights, he shares his thoughts on which markets are emerging and how to identify them. Listen Now!

 

Key Market Insights

  • Started in multifamily in 2006, did not know the meaning of LOI, NOI, IRR or Cap Rate
  • 24 of his 26 syndications are in Texas, with the other two being in Georgia
  • First deal was 14 units, later that week they bought 109 units
  • At the time, Midland-Odessa, TX had the lowest unemployment rate, flew there and met with brokers
  • Mentored by Dave Lindahl, author of Emerging Markets
  • Emerging Markets: Utah, Dallas, Sacramento, Columbus, San Diego, Portland, Reno, Atlanta, Houston, San Antonio
  • Have the business plan & pitch ready for brokers and investors
  • Looks for cash flow day one
  • 12 syndications in the last two years
  • Can raise $6-10 million in 1-2 days, investor base of 128 investors
  • Selecting the right target market is the key to deliver investor returns
  • Figured out how to have the syndication break up into TICs for reinvestment
  • Creating a $50 million, 506(c) fund for investors
  • What to look for when seeking an emerging market: job growth, population growth, path of progress, where are new businesses, how many units are coming on the market, what are major attractions and retailers?
  • To find topline info on a market, look at an offering memorandum and send info/articles to your investors

 

Bull’s Eye Tips:

Winning Your Market: Focus

 

Market Changes:

IRR Reports, Chamber of Commerce, market reports, talk to the mayor (mayor’s office)

 

Daily Habit:

Meditate in the morning and pay gratitude

 

Resources:

How to Determine Emerging Markets eBook by Vinney Chopra

 

Best Business Books:

Emerging Real Estate Markets by Dave Lindahl

Rich Dad, Poor Dad, New Edition by Robert Kiyosaki

Law of Attraction by Michael Losier

The Secret by Rhonda Byrne

Invest Four More with Mark Ferguson, Episode 125

Building a $200 Million Rental Portfolio With Vinney Chopra

About Vinney Chopra

Vinney Chopra came to the United States to get his MBA to further his engineering career. While he was here, he found his dream job and then discovered real estate. Over the last decade, Vinney has purchased 26 apartment complexes worth over $200 million. He did not buy these properties on his own but instead used syndications to buy them with other investors’ money. I have interviewed a number of apartment syndicators, but one thing I liked about Vinney is he has bought 12 apartments in the last two years, showing you can still make money in a hot market. You can hear how Vinney made it to the United States, found success, and get his tips all on this week’s episode of The InvestFourMore Real Estate Podcast.

 

How did Vinney end up moving to the United States?

Vinney was a mechanical engineer in New Dehli, India, when he decided he should get an MBA to further his career. He worked very hard to get accepted into George Washington University but could not get a VISA to get into the country! Eventually, he was able to get his VISA, and he made it to the United States. While here, Vinney began a sales career to make ends meet and discovered his love for marketing. He quit his career as an engineer and started working for a motivational-speaking company.

 

How did Vinney get into real estate?

Vinney worked with the same company for 37 years. At one point, his company moved him to San Francisco to open up a new branch. When he was in San Francisco, Vinney learned most of his friends invested in real estate. He started learning about the business, and he bought his first investment property in the Bay Area for $99,900. Vinney went on to buy a number of single-family rentals in California, Georgia, Texas, and Arizona. Eventually, Vinney got his real estate broker’s license and found the world of multifamily investing.

 

How hard is it to get your real estate license?

Why did Vinney love the idea of investing in multifamily properties?

Vinney loved the idea of multifamily investing because he could scale his business much faster than he could with single-family properties. He learned as much as he could from other investors who had been successfully buying and selling larger apartment complexes. Vinney first started looking at multifamily properties in 2004 and bought his first property in 2008. He actually bought two properties in Odessa, Texas: a 14-unit and 109-unit apartment complex. He was able to get a loan in his name for the 14-unit property and used seller financing to buy the 109-unit building. Vinney bought the larger complex for $2.4 million and ended up selling it a few years later for $5 million. That gave him a very nice payday, and his investors earned a 43% return!

Multifamily versus single-family investing

What is apartment complex syndication?

Vinney has been able to buy over $200 million in apartment complexes over the last decade because he uses a syndication. A syndication is where one person or group controls the investment, but they have multiple silent partners who invest in the property. Vinney will put some of his own money into the deal and may use his credit to secure a loan, but most of the down payment and repair money comes from other investors. Vinney will then guarantee a certain return for those investors, and if the project does really well, they would get bonuses as well. On the podcast, Vinny talks about how he has used this strategy to purchase 12 apartment complexes over the last two years. This surprised me, as many other apartment syndicators have had a hard time finding good deals in the current market. Vinney even tells us exactly where he is buying his complexes (a couple of which were flooded in a recent hurricane). He also goes into detail on how he sources these deals. Make sure you listen to the podcast to hear all the details.

How to get a great deal on an investment property

How can you learn more from Vinney?

If you want to contact Vinney, he actually gives out his number on the podcast! He asked that people text him and not call him, but he is still brave. You can also email Vinney at Vinney@monielig.com or visit his website at www.vinneychopra.com.