GameStop is a primary example.

Since its 2014 inception, investment firm Melvin Capital Management had been short GameStop, expecting the stock price to fall as digital downloads of video games overtook its brick-and-mortar business.

The precise size and entry price of Melvin’s position weren’t publicly disclosed, so the figures here are a hypothetical illustration, not Melvin’s actual results. For example, consider shorting 1,000 shares on Jan. 22, 2021, at $65.01 per share. By the Jan. 27 close of $347.51 per share, up roughly 435%, that position would show a $282,500 paper loss before fees, more than four times its $65,010 notional value. Held to the Feb. 4 close of $53.50, it would instead show an $11,510 gross gain.

Melvin did not ride that path. Gabriel Plotkin, the founder of the firm, later said Melvin closed its GameStop position on Jan. 26 before the peak and at a loss, with its thesis unchanged. In February congressional testimony, he added that Melvin also cut other long and short positions at significant losses. The eventual gain was unavailable to a manager forced out during the surge.

The lesson is that surviving the interval can matter as much as the valuation call.

Ashley:
If you live in a high cost, highly competitive or heavily regulated market, it can feel like real estate investing is for everyone except you. Our guest today began by accidentally managing properties, then used that experience to make his first purchase in a market many investors considered too difficult.

Tony:
Vaibhav spent about four years at NASA and another 20 years as a technology executive before leaving his job in June 2026 to invest full-time, which is the goal for so many of you listening. And today, we’re slowing down his early journey, how property management became his unexpected training ground, and how he chose and financed his first deal, and what changed between deal one and deal two, and how rookies can find a workable entry point when their own market feels impossible.

Ashley:
This is the Real Estate Rookie Podcast. I’m Ashley Kehr.

Tony:
And I’m Tony J. Robinson. And with that, let’s give a big warm welcome to our guest today, Vibav. Thank you for joining us today, brother. Appreciate it, man.

Vaibhav:
Thank you, Tony. Thank you, Ashley.

Ashley:
Vibav, take us back to before real estate investing. You’re working at NASA, your career is in technology. Tell us about that point in your life before you even knew what real estate investing was.

Vaibhav:
Yeah. I mean, I landed in Houston in year 2000. I was doing my master’s in computer science there, and one of the professors there at the university liked my performance. So they pulled me into their company for an internship. And that company happened to be a contractor for Johnson Space Center, which is the NASA. And I started working for them and they liked my performance of the job, so they gave me a job and I just went working there for four years until my girlfriend decided to move to LA to chase her. I came to LA in 2005.

Tony:
Is she now your wife or? She is my wife.

Vaibhav:
It was worth the chase. It worked out.

Ashley:
Now, how did you even learn about real estate investing? Where does that come along in your journey?

Vaibhav:
Yeah. I mean, I had no idea about real estate investing at all completely. And what just happened is there was an accident that sort of happened around 2008 or nine. We bought our first house in LA and it was a condo. It was only seven unit building, so it’s very small building. And nobody was willing to work on the HOA. So I had no choice. So I raised my hand and say, “All right, I’ll be the board member. What do I do?” And they said, “Here’s the first problem. Not everybody’s paying HOA dues and our situation is not good, so we need to make sure everybody’s paying HOA dues.” So I said, “Who is not paying HOA dues?” And I said, unit number one.
And I’m like, “Well, did you talk to them?” And they’re like, “They’re unreachable.” And they happened to my neighbor. So I went there and knocked on their door. Nobody responded. Then next day I went again and knocked, nobody responded. So I’m like, “What do I do now? I don’t have any phone number. There’s no way to contact this person.” So third day, just to be persistent, I go and do the same thing again, knock the door and nobody responds again. This time I decided to do something different. I pushed the door a little bit to see if the door is open or not. And the door actually opens and I enter inside and it’s completely empty. There is nothing in there. They had moved out. And by the way, for those who remember 2008 and nine, this used to happen quite often. If they couldn’t afford the mortgage payment, then they would simply leave and put the keys down on the counter or something.
And this person has done the same thing. So now I came back to my board and says, “They have left. What do we do?” And the board said, “We got to go to the lawyer.” So we went to the lawyer and the lawyer said, “Well, the banks are kind of overwhelmed right now. They’ll take about a year or year and a half to take possession of the unit. Meanwhile, you can rent the unit. We can put the lien on it because this person owes you, you can just rent the unit.” Oh

Ashley:
Wow.

Vaibhav:
So I go back and tell this to the board and board said, “Okay, then rent the unit.” And I’m like, “What? I mean, I don’t know how to do this.” So they said, “Well, figure it out.” So I started figuring it out. There was a company here called Westside Rentals, which was later bought by Apartments.com. So I kind of went there, I learned everything, I showed the unit, I listed the unit there, figured out everything, managed to get a tenant in one month. And then I kind of tended their calls, like this is not working, that is not working. I was just next door. So it was easy to do that. So I managed it about a year and after that, then we got a letter from the bank saying that we need to take over that unit. So I told those people that, guys, you need to get out.
And we had done the lease that way. And then they went out and we gave the position of the unit to the bank. So that was my one year of accidental property management sort of experience

Tony:
Here. I’m curious though, what was your motivation for participating in the board? Did they give you some sort of incentive like, Hey, you get, I don’t know, discounted HOA dues or was it just you had – Absolutely

Vaibhav:
Not. The only motivation is that there is nobody there to work for HOA. And if the HOA falls apart, your property value is in danger because of the upkeep of the property is not made. So it was just completely selfish, this thing to keep that thing running.

Tony:
So this person just abandons their property. You do this property management for the better part of a year. So once you’re done, once you guys give the keys back to the bank, are you now thinking like, “Hey, there might be something to this?” How does that – No. No. Still

Vaibhav:
Real estate is not on my radar.
So I’m happily living there and two, three years pass. And our daughter was born in 2010 and we are discussing that, “Oh, we should get a single family house now. She should have a yard to run and all of that stuff.” So we started looking for a house. Well, the first idea was that we didn’t have that much money. So we are like, “Let’s sell this condo and buy a bigger house.” That is a natural way of doing things. So I listed my condo with the help of a real estate agent. He was really experient. I remember his name, Mark, he was amazing. Listed the condo and a week went by, two weeks went by, three weeks go by, four weeks go by, and there’s nobody, nobody to even look at the condo. And I’m wondering what’s going on? And I went to the agent, “What are you doing?
What’s happening?” And he said, “Your price is too high.” And I had bought the condo for 550K in 2007. And in 2011, his comms tell us that it should be priced at 450K. Oh

Ashley:
My

Vaibhav:
Gosh. 100K down. And the agent says, “Look, who told you you have to sell this house? You can rent this house and tell me how much money you have. I’ll tell you if you can buy a house in it.” I said, “I have $80,000 in the bank. Can you get me a house in that?” And I said, “Yeah, it’s possible because the house prices are down right now. And you can get loans. You don’t have to pay 20%. You have to pay insurance, PMI, but you can get it with less than 20% down payment. So you need to be, of course, willing to adjust a little bit. You’re not going to get your dream house in that.” And I said, “All right, I know how to rent houses, so why don’t I do that?” And so I finally found a single family house and then I rented this condo.
So that’s when I enter and become a landlord for the first time. Again, the second accident.

Ashley:
So what was your experience as a landlord with the first accident and the second accident? How did you manage it? How did you feel about it? And was this something that excited you to continue to keep doing?

Vaibhav:
Not at all, actually. It’s very interesting because I actually dreaded those calls because the tenant would call me. And I remember I was on vacation in India and the washer broke or something and that guy’s like, “I can’t wash my clothes and I have to be up in India at a weird time and then try to find people here and get somebody to go fix the washer.” It was just really bad experience. But I couldn’t even afford property manager at that point because it wasn’t even cash flowing. So I just persisted with it. And as the time passed, I think my mental model developed and I figured out how to deal with these things. And the fear of that call went away. And I kind of learned the tricks of the trade and then the fear went away.

Tony:
I think the interesting part of your story, Viba, is that you weren’t necessarily super passionate about real estate investing at the beginning. And I think for a lot of rookie investors, they have this sense that they’ve got to love it, but in a lot of ways, real estate investing is just a means to an end. Real estate is not the end goal. It’s simply a tool that would allow you to get to your end goal. And I think you just framed it perfectly. You’re like, “I mean, I didn’t really like it, but I was learning as I was going and as I got better at it, it became more manageable.” So for the rookies that are listening who are maybe worried about self-managing their first property, what advice do you have to them to make it maybe not enjoyable, but maybe a little less painful for that first go round?

Vaibhav:
I think the mental model, right? It’s that you have to remove that dread. And what used to happen with me is that whenever I used to get a call, I used to immediately calculate everything that’s going to happen as a result of that call. For example, oh, it’s going to cost me $500. If it is going to cost me $500, then what would be the impact on financials? That means I’m going to be cash flow negative and then is that my return going to be negative? This is all sorts of stuff. But then eventually I realized that sometimes you get wins, sometimes you lose and it evens out. And ultimately what happened is I sold that condo about 10 years later for $840,000. Something that I bought for 550K. And in that 10 years, I had put so much principle was paid off that when I sold that condo, the check I got was totally worth it.
It was like good five, $600,000. And I’ve never seen that much money in a way. So it’s the patience, right? You develop your mental model, you be persistent and keep doing it. And then one day you’ll get that reward, delayed gratification. So yeah, just switch your mental model and it’s okay. Don’t race your mind to all the negative things that could happen. Just be in the moment, deal with that issue. And another important thing is, let’s say the washer has broken. It’s a fact. There is nothing you can do about it. The only course of action in front of you is fix that washer. Then simply do the only course of action available to you. That’s it. You’re not going to abandon that and tell your tenant that, sorry, I can’t fix that. So just take the logical action. Simple.

Tony:
So you go through these first two properties and you kind of cut your teeth on what it means to be a property manager. At what point do you transition from accidental forced HOA property manager, the current primary that turns into a rental? How do you transition from that to, hey, I think I want to actually invest in a true investment property?

Vaibhav:
Yeah. So I was working as a software job and my colleague and friend Ken, I don’t even remember whether it was my boss then or not. So he was into real estate investing as well. And he had single family rentals all over, even in LA and even outside as well. And he told me that, oh, you should read Rich Dad, Poor Dad and all the standard stuff. And I read Rich Dad, Poor Dad, and he and I used to discuss various things. And then one day he tells me… So I’m starting getting motivated, right? Okay. I need to have a rental. And I’m like, I can’t afford anything in LA. LA is too expensive. But then there are all these other cities where it’s dirt cheap. So I’m starting to think, okay, well, if I have to buy somewhere, it has to be outside LA or even outside California.
But how do I even do these things remotely? So this friend, Ken, he says, man, there’s this website called BiggerPockets and it is new and it’s apparently a social network for real estate investors. So I’m like, really? Huh? So I go home, I Google BiggerPockets and it’s like a forum. So I logged in and start watching all these forums and I see there are people from all over the United States. So next day I go to Ken and say, “Well, I signed up and it’s a forum. So what do I do now?” And he said, “Well, you want to get a property outside, right? So just look at the people from that region who are answering questions of other people. So let’s say you want to buy a property in Texas. See if there is an agent in Texas that answering other people’s questions. And if you find such person, talk to them and see if they’re willing to be your agent.” I’m like, “That’s a great idea.
That’s a way for me to judge that person somehow.” If they’re answering other people’s question properly, then that means they know their stuff. So I saw this guy called Chris Soyner. I don’t know how to pronounce his last name. And he was in Dallas Fort Worth area.

Tony:
An agent in that market.

Vaibhav:
Agent in that market. And he was answering people’s questions. So I’m like, “This guy looks good.” So I contacted him on BiggerPockets Forum and said, “Hey, can I talk to you? I want to invest in Dallas Fort Worth.” And he calls me and he was amazing actually. He helped me really get my first real investment property in Fort Worth area, Dallas Fort Worth area. And he told me which neighborhoods are good, which neighborhoods are bad. He did everything for me. And when there was an inspection, we even put an offer remotely based on the photos and his advice. And then when it was inspection time, then I flew from LA to Dallas and then actually was there for the inspection. And then I closed that house. And you know how much that house was for? $135,000.

Tony:
135,000.

Vaibhav:
$135,000. And what did it rent for? I don’t remember now, but it was 2016, right? 10 years ago. But I think it was $1,500, $300, something like that. It was pretty good actually. Yeah, for

Tony:
135,000. But it all starts, Vibob, with you reaching out and making those connections. And you actually highlighted a part of the BiggerPockets ecosystem that maybe a lot of people don’t know exists. But guys, that’s actually how I found BiggerPockets initially too. I was Googling something about real estate investing and a forum thread came up. And then from the forum thread, I found the books and the podcasts and all those things. But if you haven’t been on the BiggerPockets forums, you are missing out on an incredible wealth of information because BP started in 2004. So there’s literally 22 years as of this recording worth of information in the forums from real bonafide real estate investors, not AI, but actual people doing this daily. So if you want that context, go there. But then the other part of your story, Vibov, that’s important is that you’re in California and you wanted to go into this new market and your first kind of step was, “Hey, let me go find a good agent.” And I totally agree because when you are going remote, having an agent who knows that market really well that can say, “Oh, don’t go to this part of town.
Go to this part of town. Hey, don’t buy the up down duplexes because people hate renting those. Get the side by side.” Or, “Hey, don’t do this, do that instead.” And BiggerPockets has an agent finder tool now as well. So exactly what you did VibeBob, it’s not just built into BiggerPocket. You go to biggerpockets.com/agentfinder, type in your city and you’ll get, I don’t know, five different agents who reach out to you and say, “Hey, I’d love to work with you,” that are all investor friendly folks. But your $130,000 deal in Dallas doesn’t happen without a good agent connection first.

Vaibhav:
Yeah. And there is this fallacy in a lot of people’s minds that these agents are only motivated by money and they don’t care. They just want the deal to happen. But I have not seen that. Most of these agents that I’ve worked with, they’re pretty genuine people and they’ll tell you, “Don’t do this deal.” And I’m surprised by it. And my actual faith on humanity is stolen in a way. So it’s interesting that not everybody’s motivated by money. They will actually genuinely tell you if the deal is not worth doing.

Ashley:
Yeah. I was just talking to my brother-in-law and when he was house hunting, he was telling me that the agent he worked with was so great. And one of the things he liked the most about them was even though he wasted a lot of his time, he would take them to a showing and say, “Oh nope, this is wrong. Nope. You see this? This is bad. This bad. We’re not even going into the rest of the house. Come on, let’s go. We’re leaving.” And just straightforward gave it to him as to, “Nope, you don’t want this. This is the problem you’ll have. Come on, we’re getting out of

Tony:
Here.” Yeah. A good agent can literally make all the difference, especially if it’s in a new market. I was talking to this agent one time and she was somewhere in Florida. We were talking about short-term rentals. That what I do mostly. And she was like, “Hey, if you guys want to buy in this part of town, don’t buy in this HOA because I just heard that all of the owners have banded together and they’re suing the builder in the HOA.” And you’re not going to see that as you’re scrolling through Zillow, but because she’s there, she has that insight. And then she says something, I’d literally never heard this before, but she’s like, “Oh, by the way, if you want to buy in this town, don’t buy anything that was built in the ’90s.” And she’s like, “I bought and sold a lot of homes, but for whatever reason, the ones that were built in the ’90s are always the worst when it comes to getting insurance done.
They always get the worst insurance because something about how they built in that decade insurance companies just don’t like.” You wouldn’t even think to ask that question, but because she’s done that level of transaction, she has that insight. So agents I think are one of the most important team members for a new rookie investor to get onto their roster.

Ashley:
And I think it’s really understanding what you need from an agent. Do you need help with the market? Do you need help with analyzing the numbers? I have a great agent who’s really good at understanding the market, what’s going on, but as far as analyzing an investment, she just looks at, oh, you get it for this, it can rent for this? That’s a good deal. I have to rely on myself for that. But if you’re somebody that wants help with that, you got to vet your agent to make sure they can help you analyze the deal as an investor. So that’s really important. It’s figuring out what you need from an agent. So when you’re interviewing them, vetting them, you’re actually getting someone that can help you with that.

Tony:
I want to talk a little bit though about the success of the deal, because for a lot of people that are watching, they like the idea of $135,000 house, but they can’t get over the fact that it’s, I don’t know, however many thousands of miles away. So was it all sunshine and rainbows on this first Dallas deal? Give us the story.

Vaibhav:
I think so because I still own that rental. It’s priced around 320 right now. So it has tripled. And what I did was in the middle, I actually did a cash out refi when the interest rate was still low and I got 50, 60, 70. I don’t even remember how many thousand dollars we got out of it and bought another property, put it towards down payment for another property. So I was able to do that. And at the same time, at this moment, my principal is less than 100K remaining and it’s priced over 300K. So whenever I sell this, I’m going to get 200K check.

Tony:
For the person who’s listening by Bob, it’s like, yeah, cool. I’m in a high cost of living area. I want to go buy a sub $200,000 house, but I’m worried about the management side. What’s your advice to that person to navigate managing? Because before your first experience, they were right next door. They just come knock on your door. Now you’re doing this from thousands of miles away. How do you make it work from a distance?

Vaibhav:
Well, I mean, I just asked that agent, “Do you have any recommendations?” And then I Googled, I did my own research and I was able to find… Well, in fact, actually I did remember looking at BiggerPockets as well at that time, but I think at that time I couldn’t find somebody there. So then I found a property management company. But I think in today’s day and age, there is so much data available online. You can ask AI tools. It’s pretty easy now to do your research. So it’s very easy to find a property management company and you can even get lots of checklists from people out there, internet that just ask those questions and you’re able to find a right partner.

Tony:
So you hired a property manager for the Dallas property?

Vaibhav:
Yes.

Tony:
What was the decision making process for you? Because you self-managed the first ones. Why go with the PM for the second? Was it just the distance or what was the process? It’s

Vaibhav:
Simply my comfort level, right? Because I know that if something happens here, I could run there quickly within five minutes. My new house was only five minutes away from this property. But if something happens in Dallas, it’s like two, three hours worth of flight. It’s not easy for me to go and assist them. So I need to have a partner. So that’s what I did. Yeah. I mean, some people are comfortable with that. They have mental models that are developed. It’s really important that what you are comfortable with it, because ultimately your end is to get that investment succeed. Either it does this way or that way is not important. You have to make it successful.

Ashley:
Now, what does your portfolio look like today if we fast forward?

Vaibhav:
Yeah. So today it’s quite different because I still own those single families. I sold my rentals in LA, but now I own multifamilies as a syndicator. I’m a general partner in those… So I have a 24 unit in Sacramento. There’s a 17 unit in a Palmdale, Lancaster area in LA. There’s another… In Modesto, I have three properties, so 15 units, eight units, 14 units, it’s 16 units. So all these multifamily properties. So I make a switch at some point from single family to multifamily.

Ashley:
And how many single families did you get up to before you decided to make that transition?

Vaibhav:
Yeah, so five total single families because two on LA, I kept moving from one house to another house and just – Oh,

Ashley:
And then you keep

Vaibhav:
It as a rental? Keep it as a rental. And then I bought three of those in Dallas-Fort Worth area in the 2016 to 2018 area timeframe.

Ashley:
And you still have those ones?

Vaibhav:
The Dallas-Fort Worth are still there. LA ones I sold, and then I took that capital and put it in multifamily.

Ashley:
Yeah. Okay. So let’s talk about that transition of deciding you’ve got this stable portfolio in Dallas, but now you’re transitioning to multifamily. What got you excited about making this move?

Vaibhav:
It was COVID time, right? 2020, I think. And of course, one thing that COVID really gave you, and especially people in LA, is more time because you are saving time and commute. At that time, I was thinking that if I keep accumulating these smaller Texas properties one by one, I think in order to make any significant dent in my life, it would probably take 20 years. So I need to scale up or something. And of course, I mean, by that time, I was a BiggerPockets fan. So I’m reading their books, I’m listening to all the podcasts, I’m reading and listening, everything I could get hold of. And then I come across this podcast where Brendan Turner is interviewing Michael Blank, and he’s talking about this whole multifamily investing or syndications. I had no idea about it. So Michael Blank and Brendan Turner kind of introduced that to me.
And then in that podcast, they also talked about Michael Blank’s book. It’s the yellow book, The Passive Investing in Real Estate or something. So I immediately got hold of that book and then read that book. And after looking at that interview and that, I said, “Oh, this is intriguing. This is something maybe it’s possible for me to do it.” Then I just started reading everything about multifamily investing, every book that I could get hold of, everything. So for example, David Lindell has a book, I think Multifamily Millions is a blue book. Then Joe Fairless came up with a book, it’s a red book. I remember by the colors. Yeah. Colors and the yellow book of… So I read almost 10 books. Then I realized that Brendan Turner has other podcast episodes with other syndicators as well. So I got hold of them on YouTube and started listening to them.
Then there was a conference. In those days, the conferences were virtual,
So very easy to actually attend to them. And then I got introduced to… I went to one of these conferences, I mean virtually, and I came across all these people like Neil Bauer and Rod Khalif, Vinny Chopra, and all those big wigs syndicators. And they kind of educated me, they inspired me, and eventually Brendan Turner ended up going that way as well. So they inspired me, educated me, and I started thinking that this is something I could do. It’s possible to do it. So then the main question was, well, what is the first step? How do I even do this?

Ashley:
Well, I want to stop you right there because I want to give you your moment to be the Michael for everyone listening right now. What is syndication? Right now, you are about to teach someone what syndication is, just like you were that listener at one point. Someone out there right now is hearing about syndication for the first time with multifamily. So what is that?

Vaibhav:
It’s actually pretty simple. It’s pooling money together to buy a bigger asset that you could not have otherwise bought yourself. As simple as that. We are social creatures, right? So we come together and accomplish bigger goals. It’s as simple as that. That’s

Ashley:
A great explanation, a great breakdown.

Tony:
Yeah. Our friend, Mauricio, he talks about you can syndicate anything. You can syndicate a racehorse. You can syndicate anything that you want, but in multifamily or in real estate investing, a lot of times it’s these bigger apartment deals. Movie

Vaibhav:
Projects and then oil rigs, you can do anything.

Tony:
Yeah. Even private equity is a form of syndication because they’re raising money from a bunch of different people to go buy businesses and things of that nature.

Vaibhav:
Start tech VCs. Syndications

Tony:
As well. Right. Yeah. Anytime we’re pooling money and using that together to go buy something. I think for a lot of Rickies though, there’s maybe hesitation Vibav on scaling up to these bigger projects because even though the potential for reward is higher, so too is the risk. And I think it’s the risk part that maybe concerns people. Even Brandon, he publicly shared on his Instagram recently that one of his funds basically lost of the investor’s money. And he talked to the story of why he felt that it happened, but it is a real risk. It’s easier if it’s $130,000 single family home in Dallas that we’re losing all our money on, a lot harder if it’s a 15 unit apartment complex. So from your perspective, how do you mitigate the risk going from small sub $200,000 single family home into large multifamily?

Vaibhav:
Yeah. So first thing to understand is there are risks in everything and they’re just part of our life. When I go from my house to a grocery store, there is a risk there because I’m going to go on a public road in a car. It is possible that somebody else will come and hit me, correct? Even if I did not do anything wrong. Now, how do you mitigate At risk, you get insurance. You have two different kinds of insurance. You have the car insurance, the liability insurance, the comprehensive insurance for your car, and you have health insurance. In case you have to go to hospital, those bills will be taken care of. And then you have life insurance as well, if you wanted to, which will take care of if something happens to you, your wife and your kids will get at least some money to support them.
So there is always a mitigation. And as long as the known mitigation for these things exist, then it’s going to be fine.
The only risk, all real properties have insurances in present. So they’re going to get insured various ways. They’re going to be a liability insurance for you as well. The biggest fear comes is from not knowing things. So first thing to actually even sort of mitigate risk is to learn as much as you could about that domain. Because if you could learn those things, then there are always tricks of the trade. And if you can do those tricks of the trade, then these risks can be mitigated. And the second thing is that don’t do it alone first. Do it with somebody else and learn with them. And once you learn with them, then you know how they’re operating, how they’re mitigating the risk, and then you simply implement those tactics in your life, your projects as well.

Ashley:
How did you find your first partner?

Vaibhav:
Yeah. So that’s what I did, which is what happened is I started figuring out how do I be part of these communities? And then there were some programs from Michael Blank and other people that were very expensive where they would like, it’s thousands of dollars. You join those programs and they’ll teach you everything. And I’m like, oh, that’s too expensive. I’m too cheap. But then I found this community of Michael Blank where it was just a plan just to join their Slack channel. That’s it. That’s all. It was $50 per month. That’s it. And I’m like, I’m cheap, but I can afford $50. So I joined that Slack channel and because I was in tech, I knew what Slack was and I was using it. So I joined that Slack channel and I just started watching all the messages go by. And occasionally I used to just chime in on something.
And just by watching these people interact with each other, I could learn so much. And then one day, this woman, Savannah, she connects with me on this and says, “Oh, I have this project. I want to talk to you about it.” And then I give my phone number to her. She calls me and she’s pitching me this multifamily and she’s basically asking me that I need your money, investment. And my goals were very clear. I want to learn this. I had a little bit of money saved by this time. So I said, “Okay, I’ll invest with you if you take me along with you and teach me everything.”

Ashley:
Tony’s worst nightmare for.

Vaibhav:
And at that time, I guess she was new too, relatively new. And she said, “All right, I’ll do it.” And I said, “I’ll give you $100,000.” It was a relatively bigger amount at that time. And she agreed to it and they obeyed their word and they took me as a general partner. And then I went to the property for inspection with them. It was a COVID time. I had to go through a lot of crazy stuff at that time because the flights were like, nobody was flying at that time. It was 2020, I think. Late 2020, early 2021. Nobody was flying. So I drove from LA to Oregon. That first property was Eugene, near to Eugene, Oregon. And that’s, I think, I don’t know, like 13, 14 hours drive. So I stopped at Bay Area, my relative’s place, slept there overnight and then drove next day and it was raining continuously.
And I’m from Southern California. I didn’t even know how rain actually is. And so I drove in all that rain and then managed to do the inspection. I attended lawyer calls with them. I understood what a PPM is and all of that stuff. And that deal is what really gave me confidence that, okay, it’s all doable. And of course they were there as well, like Lupe and Savannah, it’s a couple. If something would go wrong, I could simply call up because I had developed relationship with them. We had a mutual respect about each other. And so I thought that, okay, if something goes horribly wrong, I could just call Lupe and Savannah and ask them, “Hey, how do I handle this?” So that’s how I found my partners.

Ashley:
So on this first deal, when you gave them your money, were you just a limited partner?

Vaibhav:
I was a general partner, but I was in a way passive or lower federal general partner because I was new. So I was just listening to what they’re saying and they were calling all the shots.

Ashley:
And can you explain for our listeners the difference between a general partner and a limited partner?

Vaibhav:
Yeah. A general partner is the person or a group of people who are in charge of that investment and they call the shots. And usually if an LLC gets formed, then they become managing members of the LLC. And limited partners are the people who simply invest their money or capital and they do not call shots of day-to-day operations. They have no say. At the same time, they do not have the liability as well that the general partners carry. So general partners usually guarantee the loan in many cases, whereas the limited partners don’t have that liability. So that’s the difference between general partners and limited partners.

Tony:
Now the first one was in Oregon. After that deal, you kind of learned your ropes. You mentioned that the rest of your portfolio, or at least a good portion of it is here in California. Your long-term rental, you went to Texas. What pulled you into California for the multifamily?

Vaibhav:
I think some of that experience as well is just there were a couple of issues in that property and just not knowing what’s happening exactly there was a little bit terrifying for me. So again, I thought if the property’s in California, between LA and San Francisco, I could get there in about five, six hours. That was the idea. And then I can see the things myself and mitigate it. I don’t think it’s necessary anymore, but it’s just at that point I wasn’t mentally evolved or capable of doing everything remotely. So that’s why I started with California.

Tony:
Just out of curiosity, how many instances were there where you actually had to drop everything and drive to the properties?

Vaibhav:
Actually, it’s very interesting. None. Okay. This might sound ridiculous, but it’s just my mental model was not… I was too conservative. I was just not evolved at that point. I just kept thinking about the worst possible thing that could happen. So the worst possible thing that could happen is fire and water, correct? And then I realized that you can’t even do anything. Exactly. If it’s fire, they need to call the fire department and they’ll do it. What are you going to do

Ashley:
There? You’re going to get out the garden party. You

Vaibhav:
Can go there in two days and it’ll be fine. It’s just not knowing, not having the mental model evolved. That’s about it.

Tony:
Do you think Faibov that you, because you said you had five long-term rentals before you went into the syndication route. Do you think that the five properties were a necessary stepping stone? Or if someone’s watching this today, could they do what you did? Or maybe they come to you and they’re like, “Hey, I’ve got a hundred grand. I’ll put it into one of your deals, but I want to be a general partner.” If that was your very first real estate transaction ever, do you think that they could still be successful or do they have to go through the single family

Vaibhav:
First? 100% yes. I don’t think those five properties were necessary. I just didn’t know about syndication. So I didn’t even know that you could do something like this. The only reason I started is because I kind of did it ad hoc way. Whatever came in front of me, I did it. So yeah, it’s absolutely not necessary.

Ashley:
What do you think was the biggest learning curve going from single family investing into multifamily syndications?

Vaibhav:
I think the biggest thing was, you know how that was dreadful to me, every single call. In multifamily, there were more calls like that, but then there was also cash flow to support that. And so that really took my fear away or the dread away for those calls because I really understood that everything, this might sound too bad, but everything is a number in a way and everything has a cost associated with it. And ultimately if you can afford that cost, then it’s not a problem. Water interest will go away. It’s okay. And then I also understood what is CapEx versus OpEx. And that was a big revelation to me.

Tony:
Define the difference, Viba, for people that aren’t familiar. How do you differentiate one versus the other?

Vaibhav:
So capital expenditure or CapEx is something that adds long-term value to the property. So for example, if you’re doing renovation of a unit or if you’re replacing a HVAC system, that’s like a $10,000 expense, but then that’s going to pay you off for 10, 15, 20 years. So when you do enough CapEx in your property, your property value increases. Not every CapEx increases property value. If we change electrical panels, nobody gives a sh*t. But if you change HVAC, the newer HVOCs are more efficient and they will keep running for next 10 years. Or if you renovate an apartment, that’s definitely going to get you higher rent, most probably. So I understood the difference between CapEx and OPEX, and that was very important for me. And then I understood that certain expenditure is actually going to add value. It’s not always bad. So if HVAC goes away and you were forced to replace it, it’s fine.
It’s CapEx, right? That means next 10 years, you don’t have to deal with that, correct? So those were some of the learnings from single family to multifamily.

Tony:
Were there any habits or assumptions that you had managing the single family that you tried to take into the multifamily that just didn’t translate? Like, oh man, I always did it this way when I had my single family homes, but I can’t continue to operate this way at scale and multifamily.

Vaibhav:
I think I realized that my model of me just managing things is not going to work with these multifamilies. So I have to have a property management at that scale. And then eventually I even understood that if I have to scale and have multiple of these properties, I might need further assistance as well. So then I started figuring out, oh, can I get a VA somewhere, virtual assistant or can I get a… So that was my main learning is that you can do everything yourself. If you want to scale up, then you need to get help from someone. And at that point I was also reading some of these books like Who Not How from Dan Sullivan.

Ashley:
What color is that book? Blue

Vaibhav:
And yellow. I don’t remember. Yeah. It might be orange.

Ashley:
Who were the people that you started to add onto your team? Did you hire different property management companies in each market? Did you have people in-house that were working for you?

Vaibhav:
Yeah. So I took a hybrid approach where I tackled it from all angles. So I took some partners as a general partners because then we could just divide and conquer things. So my different properties are different partners essentially. And then of course there was a property management and at some point I actually could even afford to hire… Well, actually, I wouldn’t say I afforded, but I decided to make an investment in hiring an actual team member. And she actually lives in Patterson and Modesto is closer to Patterson and Modesto is where most of our properties are. So I just made it because I still had a full-time job. So I had to figure out how am I going to do all of this without jeopardizing my full-time job, correct? So that was a revelation to me that I must take help from all these other people.
And that’s partners, property managers, and potentially an assistant or a colleague or team member of yourself.

Tony:
You talked a little bit about you still having a full-time job, but we mentioned before that you’ve since stepped away from that. And for a lot of people here at Vibab, that’s their goal. They want to be able to have at least the option to maybe walk away or to maybe walk away from the super high paying yet stressful job that takes all their time and go take another role that maybe pays less, but they enjoy more. But that is a goal for a lot of people. How did you know that you were ready to take that leap? Was it the unit count? Was it, hey, you had saved X amount of money from your day job? Was it the cash flow from the business? What was the internal dialogue to say, okay, today’s the day?

Vaibhav:
I think the amount of properties just increased to a point where I started spending a lot of my time in these matters. At that point, I’m starting to think that, okay, well, I need to be ethical. I need to be ethical to the company that I’m working for. I need to be ethical to the investors that I’ve invested in and they are counting on me to make this succeed. I’m still not, because I have assistants or another team members, and I’m paying their salaries and all that stuff, I just thought if I’m going to make this profitable and I’m going to make this work, I need to be full-time. My mind share need to be 100%. Once you jump in it, there’s no point of return. You have to figure everything out. Even though I’m not fully… I’m not 100% cashflow positive for all these operations, I decided to jump in to make it that way.
And just within one month of leaving job, I have a path to it. It’s as simple as that. It’s just me putting my mind to it. You can solve any problem in the world if you just sit a month or a week or two weeks and just focus on that problem. It’s as simple as that. I just wasn’t getting that time.

Ashley:
I want to be clear, I’m fully supportive of people keeping their W2 job as long as possible. You’re going to get better funding, you’re going to have that security blanket of a job. But we have had so many guests on time and time again who have said that once they left their job, it was like the hockey stick. It just shoots up their productivity, their success. It really did make a huge difference.

Vaibhav:
There’s actually one more factor to having a supportive wife helps because if they are telling you, yeah, it’s no problem, do it and they’re earning as well, then it gives you additional cushion. Plus, I mean, I’m at a stage where I work for these 20 years in tech and tech pays really well. So I’ve invested my money properly in real estate as well as stocks, everything. So I’m at a point where it’s not a problem for me if things fall apart.

Tony:
You have the financial foundation. I had the financial

Vaibhav:
Foundation.

Tony:
Yeah. It was literally the same thing for me. I worked for Tesla as my last W2 job and I actually lost my job in 2020 and my wife and I were trying to decide like, “Hey, what do we do next? Do I go back and get a job or mindshare?” We have, I don’t know, three short-term rentals at that point. Do we focus on this little real estate business that we had? And we’re like, “Okay, let’s give ourselves a deadline.” This was right at the end of 2020 when I lost my job. Let’ say, “Hey, let’s give ourselves all of 2021 to see how far we can take the portfolio.” And again, we had three properties. At the end of those 12 months, at the end of 2021, we had 15 properties, and I would not have been able to even get close to that if I was still working my full-time job.
But to your point, the mind share and just my back is against the wall. I got to figure this out. That’s what allowed us to really scale. So I love that you kind of took the same approach.

Ashley:
Well, Viba, thank you so much for joining us today on this episode. Where can people reach out to you? And you also have something to share with us today.

Vaibhav:
Yeah, absolutely. So my website is oldmoneycapital.com. Why Old Money Capital? That was the domain that was available, so it doesn’t have any story. So oldmoneycapital.com. I just actually published a book which is available in Amazon and Audible. The book is called Own Real Estate, Not the Headaches. And this book is written for passive investors. So it explains syndications to them and it removes the fear of syndications from them. Syndications are becoming more and more accessible now. So it’s very interesting because an earlier syndications were limited to few ultra net worth people, but now just a middle class people are invested in syndications as well. So it is very important that they learn what the syndication is before they actually jump in it. So this book actually solves that problem. It’s meant for passive investors. Well,

Ashley:
Thank you so much for joining us today. We really appreciate it. And to all of our rookie listeners, thank you for joining us also. If you’re not already, make sure you are subscribed to our YouTube channel at RealEstateRookie. You can also follow our Instagram @biggerpocketsrookie. I’m Ashley. He’s Tony, and we’ll see you guys next time.