The Entrepreneurial Spirit and Chasing Your Dreams With Pancham Gupta

Unknown Speaker  0:07  
Hey there, and welcome to today's episode of cash flow Pro, your daily real estate investing podcast and YouTube channel. Now, as my listeners are very well aware, I always try to get names correct. So I'm gonna give this a shot. I want to welcome Pancham Gupta, with Mei sells capital. And he comes to us, he's was just telling me they've got about $250 million worth of assets under management. And he is excited to tell his story. So Patrick, welcome. I hope I didn't butcher that too bad. I gave it my best if I did. So welcome. How are you today? I'm doing great. Well, thank you, Casey, for having me. And no, you did not butcher it. Very, very, very close. The big win for the day right there. I didn't butcher it. I got it. All right. And anyhow, so why don't you start us off, tell us a little bit about yourself, where you come from, what got you, you know, interested in real estate, and then we'll take it from there. Sounds good. So it's a long story, I'm going to make it very short. I came to the US in 2003, to get my master's degree in computer science. And the idea at that time was that I'll get my degree, get some work experience. And then I'm gonna go back to India to start something on my own. And, you know, so I graduated in 2005, it started working, you know, plan was still the same in 2008, I got married 2009 rolls over 2010, right, and we sell all of our furniture, and we decide to go back, right? And we find out that my my wife and I, we were expecting a baby. And we were like, You know what, it's very hard to move, even houses when you're expecting, so let's delay our plan for a year. And lo and behold, you know, I'm still here, in 2011, I decided that, you know, I would live in this country forever. And so we bought all our stuff back, you know, whatever. And I didn't like that, right? She got to get rid of all our old furniture and then buy a new

Unknown Speaker  2:21  
bed, she was happy. So she was very happy. And then, you know, in 2012, I started since I was going to live here, forever, I started educating myself about, you know, investing in this country and how to, you know, invest in real estate, I picked up the book, Rich Dad, Poor Dad, and I'm sure many, you've talked about it here many times. And

Unknown Speaker  2:44  
then I picked up a Cashflow Quadrant and I will tell you those books changed my life in 2012 and 13, I bought two houses where I live before I bought my own house. So I bought two rental properties. And then I bought my own house and I got hooked into this. And it became it started as a hobby, but it became an addiction in a good way. For me that I was one of those fathers who was in the in the soccer game for the kids and you know, had these big headphones on listening to podcasts like this one, you know, to really educate myself on real estate, I would not talk to anyone, my commute was one and a half hours each way. And I would read books and listen to the podcasts educate myself and all of my vacation days would be spent on going out flying different places looking at properties. And in five years, I had like five, I had invested in five different states, I had, you know, properties which are managed by smaller properties to single families, two families, three families.

Unknown Speaker  3:53  
And they were managed by property manager and I got to a point where I start, I was loving this stuff. And also it was getting very difficult to manage it with my full time job. So I had to make a decision that what I want to do, and

Unknown Speaker  4:10  
it was also not very scalable, I felt that you know, just adding 1234 these properties and trust me it was going great. But I felt that it's it was too slow. And also it was taking too much time and I on one side had a very high paying job in New York City. And on the other side, I had this passion for this stuff, which was not paying, you know, not even close, like would not even it was not even meeting my expenses in any way from the cash flow. So I talked to my wife and you know, I was like, You know what, I want to do real estate and talk to my parents and they're like, are you crazy? Like, are you going to quit your half a million dollar job and you know, go go and do this this thing which is not even paying your way

Unknown Speaker  5:00  
ELLs and and what about the benefits and this and that, and I was, you know, I hear them they are trying to protect, they were trying to protect me from me. And they were also scared at the same time, so it was very hard. But I in 2009 to 2017, I quit my job for good. And since then I have,

Unknown Speaker  5:24  
sorry, 2019 Aqua 2017 is when I decided that I will quit in 2019. And so I quit my job. And it was a very hard process there. And I can walk you through how I got to the point to quit and convince my family. But so there was a two years. So I want to just just to add context to this before you go into because yes, that's our, I have a lot of listeners who reach out. And that's their thing. I'm currently working a W two job.

Unknown Speaker  5:57  
I get up in the morning, it's like office space, I go to my cubicle, I make good money, but I go home. And it's not very the word that I always circle, this whole thing around is fulfilling. And it's not that these people hate their jobs, necessarily. It's not that they don't make good money. It's that they get up every day. And they feel just as empty when they get home as they did when they got the work. And so yes, so you said you're saying 2017 to 2019? That was your, your, your self defined transition period. Correct? That is correct. You know, even though I wanted to do this for a very long time, but it was really that those two years were the redefining moment where I trained my mind to get rid of the golden handcuffs, like you said, they they're making the money. Right? I was making the good money, right. And I was, you know, my job was good. Like, you know, I did not hate my job in any way. I actually liked my job, the entrepreneurial spirit. Exactly. And that's, that's a tough flame to put out. It's a tough flame to say, it's a tough, it's a tough box to push to the side and say, Hey, I don't really want to be it, you know, because once you once you have that, that thought of man, you know,

Unknown Speaker  7:25  
easy way to proceed.

Unknown Speaker  7:29  
So, I tell you, for me, and it might be very easy for some of the people that you've interviewed before. But for me, it was very hard given that it was a

Unknown Speaker  7:40  
very high paying job. And my family was not really insane. And I myself was really, you know, difficult for me, mindset wise. So I actually hired a mindset coach to help me actually quit my job. And it's a funny story. The day I decide that and it wasn't cheap, that coach, I go to my wife, I'm like, You know what, I've decided that I'm going to hire a coach to help me quit my job.

Unknown Speaker  8:11  
So I'm gonna go spend money to learn.

Unknown Speaker  8:15  
Exactly.

Unknown Speaker  8:17  
And there was no sound for a second and she's like,

Unknown Speaker  8:20  
I'm like, I'm gonna hire a coach to help me quit my job. Then she was like, just go quit

Unknown Speaker  8:29  
spending money,

Unknown Speaker  8:31  
you know, to to actually help you how not to make money. Yeah, yeah. That's a that's, that's a that's a fun. That's a that's a like, yeah.

Unknown Speaker  8:41  
When that happened, you know, obviously, she agreed, and I actually hired a coach. And for I've worked on my mind, basically, it was really helping me to get out of my own mind, because we have this programming that has been done over the years, which is very hard to get rid of. And, you know, in 2019, I successfully quit my job. I did not like for the listeners were thinking, Oh, maybe in two years, I had enough cash flow to pay my bills. And that's why I quit. No, it wasn't the case. I had saved enough for two years, to survive two years to make sure that I'm going to be able to pay my bills and still have some leftover for two years that I can survive, and I will make sure those two years is when I will make it you know,

Unknown Speaker  9:28  
worthwhile for for myself. Yeah. And and that's so interesting, because, you know, and I oftentimes bring up on this show, like for instance, I joined a mastermind and through that mastermind, specifically for capital raising specifically for for capital raising for real estate. And through that mastermind, there is an effect a whole group of mentors but there's a couple in particular that that I'm

Unknown Speaker  9:58  
closer with than I am

Unknown Speaker  10:00  
There's, and with what you're saying about I know, while the the idea that I'm going to go hire a coach to help me quit my job sounds at, at the, at the base of everything sounds crazy. But at the same time, there's this you're right in your mind and the way that that, that if you have an entrepreneurial spirit, the hardest part is bridging that gap between, hey, I want to quit my job to how do I fit this square peg into a round hole, the square peg being

Unknown Speaker  10:38  
the entrepreneurial spirit and chasing your dreams and doing what you want to do in the round hole being putting food on the table and providing security and comfort and safety for my family. And when you when you start looking at it, from a broad perspective, it can it can be it's pretty daunting, honestly. I mean, it is very daunting, very daunting because I was at work and a lot of people I my friends, colleagues, they were also in a similar boat where they wanted to quit, but there was no path and you know, or they were not spending enough time to really, you know, putting more fuel to ignite that flame forever. Right? So that's where it comes down to that you really have to have, like, you need to know your why the why has to be strong enough to push you to the edge where you're willing to burn the boats and go to the other side. Yeah, and you've got to, you know, and it's a lot of people.

Unknown Speaker  11:38  
A lot of people get caught in the idea of rushing the prospects of quitting and and while that while when you finally do decide it's like the it's like, the day that I'm ready to walk in and quit that WT now I have to I have to be mindful what I how I trade into this water because that's not my story. I didn't come from a W two in hopes of that. So I guess but I came from I came from a very similar mind shift where I was like, when I woke up one day, I was feeling like I my path was a little different. Where I felt like this was the next rung to my career was was moving into syndications. And this and helping people generate leads through all kinds of different sources. And so, but at the same time, I think that mind shift is basically has to be the same. It's virtually the same thing, just a different set of circumstances.

Unknown Speaker  12:37  
Absolutely. But yeah, so that's, that's interesting. And then and so so I'm assuming was your wife then on board? Yes. So it was it was a long process. Like during the time when I was going through this coaching to help my own mind, I was preparing her to and she was on board, eventually. My parents and, you know, if you were to ask me today, our if you ask her today, that was that a good decision, she would be like, you know, we should have done it sooner. And you know, just the kind of freedom you get the time freedom, you know, the location freedom. And as well, as you know, we're at a point where we've reached financial freedom as well.

Unknown Speaker  13:21  
It's just, you know, spending time with the kids going to their games this morning, when we are recording this, you know, my son had a field day, and he wanted us to come and you know, you can do that before. You couldn't do that, because I was at work. And yeah, I know. COVID has changed a lot of things where a lot of people are working from home, and this might be very possible now, before when I quit in 2019, just six months before COVID. And that's another story. And it's all in its own, you know, where

Unknown Speaker  13:54  
COVID had right after six months. And if you really remember things were like, it was like, oh, what's going to happen? The wall is coming down. Right? So it was it was it was scary, scary time. But yeah, you know, I love these freedoms, and you're only being able to decide your own time. Yeah, and I oftentimes say, on this show, as well as as, as marketers, because that's, that's at the end of the day that that's what I enjoy about that. Marketing is kind of like the that's kind of like the fringe benefit of doing this businesses then you get to be a marketer, and you get to be a marketer that tests and has fun and tries different things and this and the other but, you know, as marketers, we have this I had this bad habit, and I'm sure that this is probably a common thread that we all share, is

Unknown Speaker  14:48  
I like to find the line and walk absolutely positively as close as I possibly can to that line, sometimes even reaching my hand over and you don't I'm saying so you really

Unknown Speaker  15:00  
They put those you really push down boundaries. And as you push those boundaries, you realize that man, I can get out here and do this. Because

Unknown Speaker  15:10  
the thing is, is that that, going back to those prior beliefs, like you had stated before you got into the businesses, there's a lot of people out there that think, okay, let's just say a 300 unit, apartment complex, okay, 300 doors full, bringing in this, this, you know, it's bringing in a certain amount of money, it's costing a certain amount of money, and there's a certain amount of profit being made. And if we're conditioned to believe that, and you can't do that kind of stuff, you have to, you need to focus on, you know, you can't go outside, whatever your comfort zone is. And and while then you say, right there, how many years and $250 million under assets under management? I mean, that's unbelievable. That's

Unknown Speaker  15:50  
five years. Yeah. Yeah. So I mean, you know, $50 million a year. And you look down to that's a million dollars a week. I mean, that's so a million dollars a week, you for five years, you have it's obviously a little bit less than that. But rounding purposes, my head, yeah, but I'm just what I'm getting at is, is that that's the kind of stuff that these dreams are made up. And with, with that kind of, it seems to be like that round peg started kind of getting a circular look to it, and you figured out how to make it work.

Unknown Speaker  16:22  
Yeah, that's, that's fabulous. Man, that's awesome. I mean, I'm tickled to death to hear that story. So talk us now into a little bit about me sells capital and, and what what may be your strategy kind of is circled around and what type of assets you look at, and, and then maybe even lead us into a little bit of, of how you raise your first capital. Sure. So nesis capital, we are focused on buying value add multifamily, in six, MSA is in the southeast many states, North Carolina and Florida, you know, Raleigh, Charlotte, Wilmington, in North Carolina, and Tampa, Orlando, and Jacksonville in Florida. These are the six MSA is that we are focused in from the very beginning. And we do have properties in some other places too. But you know, these are the main main focus. And our goal is to really,

Unknown Speaker  17:21  
you know, buy value add multifamily, and add value and then exit or do a cap capital event and return capital to the investors right. And in the process make the property better. And you know, what? Refinance? Does the investor hold their position? Or no? Yeah, they hold their equity. Correct? Yeah. So.

Unknown Speaker  17:44  
So that's, that's what we do and very high level at a very high level and your question on,

Unknown Speaker  17:53  
you know, how did we raise our first capital? So going back to that story in 2017, we, I was doing real estate already, right? I was buying properties. My colleagues, my friends already knew what I was doing. And I,

Unknown Speaker  18:08  
I found my partner at my company where I worked. So both of us were doing our own thing in real estate separately. When we join hands together, we said, You know what, let's do a couple of flip projects and some of the things, smaller projects together. We did that. And our friends and family at the time, they all wanted to put money with us. We didn't take any money at the time. But that was kind of a lightbulb moment, right? At one point when we looked into syndications.

Unknown Speaker  18:40  
We kind of reached out to them when we decided when we decided we were going into syndication. So our very first deal was, you know, a $2 million deal 44 units, and we raised about 781,000, for that deal. And all of that money came from our friends, family and colleagues 101% of that, and we had to Yeah, we had to reach out to people who we hadn't reached out before. But there were also people there who were already ready to invest with us, because when we bought that 44 unit property, there was a 78 unit property before that, which we were under contract on to buy, we did our due diligence, and we were preparing our investors about that particular property and they were okay investing in that, but that deal did not go through. We lost money on that. That's another story. But we basically had people primed up, ready to go, when we actually found something that we were closing on. Yep. Yep. And I'd say that's a talent in and of itself, because a lot of times so one of the one of the biggest, I guess, elephants in the room for me when I came in, was how do you go from? So basically, you said

Unknown Speaker  20:00  
Then you've got one of two options. You either raise capital and you take it immediately, or you soft commit, and then you do capital calls. And

Unknown Speaker  20:12  
somewhere in between those two, which there's really, you know, so that's to me, I was like, oh, okay, so do you take the money immediately and have to start paying higher interest? And once you get the bank, or do you hold the commitment, like softcom? Yeah, the commitment of some sort, which may or may not be fulfilled, and that's when a lot of guys were saying you need to, that's why you need to raise a third, a third to half more than what you actually need. So yeah, man, I mean, that's, that's awesome. So how did you which which route? Did you go? Did you get soft commitments? So you had well, but you had soft commitments for a deal that was under contract, or you had commitments for deals under contract, and then was able to, to just, like, make an immediate pivot and get started on something else? Right. Right, we did that. And also, even now, that's what we do. I mean, we do have a fund.

Unknown Speaker  21:10  
You know, it's the purpose of that font is totally different. But, you know, for all of our multifamily deals, what we do is, we do exactly that to the state where, once we have a deal, we go under contract, and we do our due diligence. And once we are good with the due diligence, at that point, we will release the deal to the investors, and we will get soft comments, and we will try to go over, like you said, you know, from whatever the commitment is, if we need 10 million for a deal, we'll try to get to 12 to 13 million. So that, so you're thinking you're thinking like 20%? So you Yeah, you all think and I'm sure, the longer that you do that? This, the less offs gets left over that time. Yeah, before we had high drop offs. Now, we have gotten gone through full cycle on, you know, three deals already and two are under contract to be sold. So all these people are, you know, bringing their friends family along, and friends of friends and all that. So, you know, I think that drop off goes lower, I'll tell you, we had a huge drop off for one of our deals that we did during COVID. So March 2020s, when COVID hit, we were under contract to buy a deal in Raleigh, North Carolina. And I still remember to this, to this day, that date is crystal clear in my head is grind 2020 is when we released the deal, our deal. And March 9 2020 was the week when the Dow had the biggest drop in the history of Dow. Okay, so

Unknown Speaker  22:55  
the same day when we release our deal, and we are raised was about 5 million on that. And I remember a

Unknown Speaker  23:03  
lot of people were very, you know, scared because of that. And the the and rightfully so. Right. And we we actually ended up, you know, reducing, getting the reduction in price seller was scared to all of those things happen. And we ended up doing the deal. But to answer your question, yeah, we did have a big drop off, but we had long time there. Sure. Yeah. And it's that's got to be

Unknown Speaker  23:30  
I mean, when you start looking at that, and, and, and again, those stories are kind of what is shaping. That's, I talk about common threads all the time. And that's kind of the common thread again, that, that I feel like all syndicators have in common is is a COVID story of some kind. Because it was such a defining moment and syndications. And really post the Jobs Act

Unknown Speaker  23:58  
are still kind of in their infancy really, I mean, maybe maybe a little bit. They're getting a little bit more advanced every day as more people figure out what they are and how they work and the structures that need to be put in place but but that was there's so many people that have that COVID story about everything going and churning and going they're buying they're doing they're putting ello eyes they're raising money they're doing down payments, they're putting earnest money up and then all of a sudden we're all standing there and that that that however long after Rudy go bear got tested in the NBA did the entire world shut down like the whole world with a moon and yeah, we were all a sudden blocked at home nobody's on the road and so

Unknown Speaker  24:44  
you're sitting there with however much earnest money out and deals and just have no idea which way to turn so but so tell us, you know, so So where are you at right now? Are you? Are you currently still raising capital from friends and family do

Unknown Speaker  25:00  
You have a sorcerer, or or have you gone outside of your your bubble, I guess is to raise outside outside capital? Yeah, we have we have. And we did that some time ago. That was the only way to scale like, you know, we we do 506 C syndications where we also advertise. And because we were getting so many referrals, it's very hard to know everybody. So we, so we have friends and so all of those guys like our own bubble, which got bigger. And then we also, you know, bring on one or two partners with us who have their own network and they bring in where do you? Where do you find new investors? Purely referral? Pod? Yeah, so far, it's been only reference for us. Like, we don't do any marketing. We started marketing this year. A little bit. It's not yielding any results. It's mainly marketing. Sorry, reference referrals. Yeah, marketing is marketing is is a is a play that.

Unknown Speaker  26:10  
That is, it's obviously a different path. Now referrals but you but ultimately, at the end of the day, the referrals, you have to have the referrals to in order to keep chug a lug and forward, you know, exactly. And, you know,

Unknown Speaker  26:23  
we are engineers, so to catch up there we are engineers, so me and my partner, and we are really bad at marketing.

Unknown Speaker  26:31  
The things that we did hire an outside agency for that this year.

Unknown Speaker  26:36  
So we'll see how that goes. Just started on that. Yeah, yeah. And that's an if you can find somebody that can, because I'll just, uh, just a little marketing tip for the listeners. One of the biggest takeaways from a book that I recently read, which I've read it like five times. So this is the last time I recently read this book, traffic secrets by Russell Brunson. It talks about the biggest. One of the things that the defining moments of the book for me, was when you realize that, that when you're advertising, like, for instance, this podcast, okay, I have to be aligned with people that are listening to podcasts. I can't take an advertisement for this podcast and go put it on Instagram. I can. Obviously it's perfectly legal, and you can do anything you want to do as far as that's concerned. But it's very difficult to move people from one marketing channel to another, and have there be any resonation of of listenership, I guess, if you will. And so, or like, for instance, if people that digest Instagram, it's very difficult to move them to say tic toc. And I mean, I guess that was probably a little easier than then what I'm talking about. But I guess what I'm getting at is marketing is a very, very finicky very.

Unknown Speaker  28:00  
I don't know, it's just, it's tough. It's really tough. But if you are a company, I wish you all the best. I hope, I hope that picks up because it seems like you're just you once you all put a little, little fan to the flame. You're gonna you'll get a you'll get rockin and rollin. As far as that goes, yeah, thank you. Yeah, we'll see how that goes. So yeah. Go ahead. Go ahead. Go ahead. Go ahead. Yeah, not to answer your question. So where we are like today, we are very actively buying, given what has happened in recently in the market because of rates rising, you know, market dropping similar kind of it's not COVID kind of event, right? Obviously, very, very, very, very far from it. But from the stock market point of view. It is definitely quite people. People are scared. Let's put it that way. Right. So our strategy has changed on the six MSA is that we are we were taught I was talking about, we are only focused on great locations within those mshs. So we are only at this point, like my partner. He's moving and I'm moving to Florida. I live in New York right now. And the reason I'm moving is that to be closer to the properties and being there, make sure no, no, I don't want to hear that the reason I'm moving to Florida I want to be closer to my properties. I want to be in Florida and

Unknown Speaker  29:30  
I don't blame you. That's exactly now that's the answer I was looking for. Yeah, no, that's the really rich lifestyle choice like I was referring to before now we have the option of living where we want to live so

Unknown Speaker  29:43  
No, I'm just I'm just picking that that's that's great. i i I admire that and that's a big move to I mean, that's that's almost a it's almost an entire culture. Shock move in a way from New York City to to for anywhere from

Unknown Speaker  30:00  
Really, but sorry. So there's a couple of questions that we ask every guest that comes on the show. And there's no right or wrong answer. But without.

Unknown Speaker  30:10  
I tried to tell people don't use Rich Dad, Poor Dad and don't say the Bible, but what is the best book that you are currently reading? Or have read or recommend? Yeah, so I'm a voracious reader. So I read a lot, a lot of books. And right now that I'm reading, and I think has changed my life changing me is called atomic habits by James clear, and one book, I would highly recommend that people who are thinking of quitting their job right, and are kind of struggling with that is the end book that helped me was turning pro by Steven Pressfield is like turning professional and the way he breaks it down, like, who is a professional and who is not? Yeah, it's really good. And it's a thin book, but it's very heavy, like, you know, a lot of meaning to it. That really helped me. Great. That's awesome. Now, what is a dream vacation that you have either taken or hoped to take?

Unknown Speaker  31:16  
So one that I've taken is our Italy trip that was all pre COVID? And, you know, we went in, you know, had family coming over from India. It was a lot of fun. And my read in the middle in it. Yeah, exactly. Exactly. So that's, that was one that we really loved. And for me, it's like exploring Europe and generally South America, I would, you know, it's really something I want to do. Like traveling, right? Yeah, we got my wife and I love Europe. Everything, everything Europe, European to us, we, we want to explore and see and do and we've been forever. We've been from Italy to Romania, and we love everywhere over there. So well listen, if the listeners heard something that resonated with them, or they want to reach out to you at Miss Ives capital, what is the best way for somebody who wants to learn more to get in touch with you? Sure, they can reach out, they can go to missiles capital.com, me SOS capital.com. Or they can email me at my first name, dot last name, which is Pancham dot Gupta at missiles. capital.com. Awesome. We will put that in the show notes. And make sure that if somebody needs to get a hold of you or wants to get ahold of you to learn more, that they certainly can so pension thank you so much for your time and good luck on the move to Florida. I know I feel so sorry for you that you're gonna have to go down there and put up with all that sunshine, and all of that decent weather. We'll be praying for you. Okay.

Unknown Speaker  32:58  
Thank you so much for taking the time to be on the show today. Well, thank you for having me. Absolutely. Have a good day. Yeah, you do.

Transcribed by https://otter.ai