Every realtor has a dream of acquiring massive land and properties in a good deal. Since coming to the US more than 40 years ago with only $7 in his pockets, real estate syndication legend Vinney Chopra has achieved success in several areas – marketing, motivational speaking, and real estate investment, to name a few. In today’s episode, Vinney shares his recent massive acquisition deal of 24-acre land with all block construction and a lot of great amenities. Vinney’s diverse knowledge has allowed him to gain sharp insight into acquisition, syndication, and property management of multifamily properties. As he continually moves to new markets, learn what gives Vinney confidence in achieving it. On the side, discover if rebranding properties are worth a penny and how supplemental loan works with investors.
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Mastering Land And Property Acquisition with Vinney Chopra
Our guest for this episode needs no introduction. He’s one of the most experienced people in this industry that I’ve met and the most generous person as well. His name is Vinney Chopra. Thanks for being here again, Vinney.
Thank you, Whitney. It totally is a pleasure to be here with you. I hope I can add some value to your great audience and congratulations on such a terrific show.
Thank you so much, Vinney. I know you’re going to add value. You always do it. Just a little about Vinney, in case you haven’t heard of him. He came to the US with only $7 in his pocket. Now he has over 35 years of experience in real estate, fifteen years in multifamily syndication. He does all aspects of his business. It’s amazing what he’s accomplished. Do you have over $220 million of assets and assets now, Vinney?
Almost $270 million.
I know you’re in the process of a large acquisition now that we’re going to get into and some things that have been happening for you. Get us caught up a little bit and let’s jump into this last acquisition.You have to have some good strong base of investors. Click To Tweet
I wanted to mention that it’s great to have affirmations in life. You want to set goals, deadlines and so forth. Something which I wanted to share was we had set a goal twenty years back. We’ve been living outside the country club here in Danville Blackhawk. I just had a vision. Hopefully, God will give us the strength and the buying power to be able to move into the country club. I’m very fortunate and humbled that God has given us through syndication of multifamily. Everybody’s talking about investing in the same location or invest in multifamily, 8, 12, 15, 20, 30, 300 units. It scales up and your network increases, your buying power increases, things like that. That is a great thing to keep. Don’t give up on your dreams.
Congratulations to you Vinney. I’ve seen a brief video of this new home and this dream coming alive for you. I just want to congratulate you and your family and what you’ve been able to accomplish and your generosity in helping the readers and myself get to that level where you’re at. Thanks again for that. Give us some details of this new deal and let’s go in depth a little bit about what it is and where it is and why you like it.
As some of you know, I’ve been in Texas. That’s how I started, cut my teeth and got the training and everything. I was there ten years almost. In 2016, I went to Atlanta, Georgia. It’s been really fabulous. I went there and met with a lot of people, brokers and all and bought two deals and those are doing fabulous. I got one deal for $10.1 million and I’m selling for $15.4 million right now, right there in Atlanta. We are not selling the other one. I paid $12.2 million or something like syndicated and now it’s worth about almost $17.5 million to $18 million. I’ve been looking at Florida for some time. When I go into a market, Whitney, I go full motion into it. You’ve got to immerse yourself, look at all the job markets, look at everything that’s happening. Jacksonville was something we were looking at quite a bit for the last seven months and then Orlando and Tampa. A lot of people are ultimately looking at this deal. It’s called The Bentley at Maitland and we are closing it on it now. It’s a $52 million deal, which is exciting. They were 122 tours. It goes out in the open, fabulous 324 units and it’s right about $52 million and we’ll be closing. Fannie and Freddie were fighting over each other to give us the loan on this one.
With 122 tours, obviously there’s a lot of interest in this property. There are lots of people looking and wanting to purchase this deal. Why were you selected over all those? What made you stand out?
I have to really give credit to my partners. We went 50/50 on this one, Enzo Multifamily. They are beautiful and great people. I have known Enzo Multifamily for several years and we were thinking to combine forces. That’s what came. They brought the deal and they had relationship built-in with the broker from this Maitland. When I looked at it, I fell in love. I flew there and it is almost like a resort. 296 units were already upgraded with millions of dollars. You only have 28 left out of 324. There are a lot of value plays great valet, yoga place, exercise, and increase in rent is almost $100. That is not done yet. Our classical units, it would be a lot more, maybe a $200 increase in rent. Things fell in place. Their relationship with the broker, I want to give them credit. Sapan and Veena and the whole team, the founders of Enzo who would able to bring this home. I didn’t have to do too much on that. I don’t want to take the credit.
Obviously moving into a new market, as you talked about, obviously you’re heavily invested in Texas, then you were in Atlanta and then you’re now moving to another market. How has that had to change your company? What’s had to change internally to be able to say, “Now we are confident moving to this new market?” I know a lot of it’s because of a new partnership.
You’re right and also all the reports. We immersed ourselves in the job market. When I flew there, I saw cranes all over, like in Orlando. I’m sure a lot of investors that are already going there, which we are in the higher levels. We are looking at 200, 250, 300, 400 units. What I found was probably Orlando in my mind is like Dallas was a few years back because the freeways are getting expanded, cranes, more jobs are coming, more technical jobs, a lot of other stuff that is happening. That’s what made us realize, “Let’s go over there to Orlando and Jacksonville and Tampa.” Miami is great too. I know Grant Cardone is buying quite a bit in Miami. That’s great. This is such a big pie I believe and everybody can be really fully compensated and work together to get their range of different units that one can purchase.
Tell us about the business plan for this deal.
The business plan is a pretty strong one. It’s a stabilized asset. That’s why everybody wanted to get into it, like 95% to 97% occupied always. There is a room for growth if we just burned lots of lease as the people who are living there and the market rent at present, it’s going to Increase in value by $6.7 million just by doing that. The valet trash we’ll be doing because these are white collar. We could say it’s a B-plus in A-minus area. There are lots of jobs around there. We’ll be able to push the rents up. It’s 24 acres of land, all block construction and a lot of great amenities. We’re thinking about doing the special plugs, the sockets which have the USBs and all that because they like those. Built-in lockers also and parking. Out of 324 residents, there were only 70 parking spaces at this time and it cost us only $10 to put a pole and say reserved on it. We’re going to be increasing that and charge $25 to $30 and we’ll keep on adding as many parking reserved spaces near to the unit because you drive right to the unit. It’s a two-story only and it’s spread out all over. That’s another value play.
The business plan is really tremendous. In our package, we have given $850,000 we going to spend. It’s a beautiful package. Our company, Moneil Management Group, will be managing it along with Enzo. It’s a 50/50 deal and I’m very excited to be working with them. Our hiring director, she’s coming, Sapan, myself at Moneil. We are coming in there interviewing and most of the staff will be working and become employees of Moneil. We have talked to the seller already and they said, “Sure, please interview.” They have shown interest and we are very fired up about that because if an asset is doing so well, there are positive things that we look at and we don’t want to change the name but we want to make sure that all the things that they are doing to be successful, we keep on doing them.You never tell investors that you want money from them. Click To Tweet
Quickly on that, as far as you don’t want to change the name. I hear a lot of people talk about rebranding. Is it worth spending the money on rebranding? This time you chose not to. Tell me how do you make that decision?
What I’ve done is in the last 26 and this is the 27th acquisition for me, I think we have changed names for most everything except four times. When the property has a good name, like Villas at Autumn Hills. Villas at Autumn Hills over there in Atlanta is in a great and beautiful location. A lot of people were saying, “Vinney, don’t buy there.” I said, “I know the constructions and everything happening.” Atlanta is becoming the movie studios of the country now. Atlanta is producing more movies. That’s what has done over there. I kept the Autumn Hill’s name there and put villas in the front. In this one, we have a joint promotion. We are not going to even put villas, just keep it just like it is. We don’t have to change the signage or stationary or everywhere. It’ll be the same. When the property is stabilized, it has a good name, the views are great and websites are made and all those things, then we don’t change them. If you’re putting lots of money, like millions of dollars to really renovate them and the bad name is there or other things, then we change the name and we do the ribbon cutting ceremony in about six to nine months. Invite the mayor, invite the Chamber of Commerce, everything, have a great luncheon and have the fire engine come in. We do a big hoopla and have the local press come in. That’s the way to do it.
I’ve heard different people have different takes on like, “Should I rebrand? Is it worth the expense?” That makes sense. On this specific opportunity, the one in Orlando. What about financing? What’s the financing look like on that opportunity?
The financing is amazing. Again, I want to give credit to Enzo Multifamily. They have been working with the broker, a wonderful person, Melissa. She is a great broker who was able to sell our story. Financials and everything and who we are, our profiles, to Fannie and Freddie and they were fighting with each other. That was the best thing. The bullfight, who we give this loan. It’s a great thing when the asset is awesome. They’re the same two arms of the government but they don’t know each other that much. They do their own allocation of the funds. Freddie won. They gave us $80,000 rebate to not charge us for the rate lock that happened. We said, “That is a good one,” and their terms were very good too, ten years fixed and five years of interest only. Five years of interest only and we locked in the rate of 3.82%, ten-year fixed, with supplement and only 1% prepayment penalty. 1% only after the lockout period. It’s one of the best dream loans we have gotten and five years of interest only.
We loved that because as we add value to the asset, it’s the dead money. As we add value, the valuation goes up, but if you are paying the principal down and interest after one year or two years, then you have that dead money staying there. By having interest only, we have a lot more cashflow at the bottom line. We like to under promise and over deliver. Our philosophies at Moneil, which I’ve built over twelve years and Enzo’s are very similar. That has been a good union. The good part also is I think in our brochure, OM 17.1% or something like that, we told them ours was coming to 19% on our underwriting. We gave them 2% less just to show them and now we are coming close to 21% IRR.
What’s the hold period for this property? I don’t think we mentioned that.
Usually in our PPM, Private Placement Memorandum, we say about four to six years. We will look at this asset in about three years because we think it’s going to grow in value then we might get a supplemental loan, which is true and then we can pay off the investors, but they still keep on getting the returns until the equity gain. It could be three to four years. We’ll look at it and see if we can do a supplemental loan or sell it. We are thinking about selling it in four years.
Tell me a little bit about why you’re doing a supplemental loan and how that works with the investors. You’re paying them then. How does that work?
If you’re refinancing, that’s what it is. In the Fannie and Freddie branch, you cannot get a second loan from outside. You have a supplemental clause in there, in the loan documents, Whitney, so that way you can bring out the cash. It’s a refinancing, it’s called supplemental. It’s the same thing in Freddie and Fannie. You’re returning the capital. It means no tax consequences. It’s not a capital gain because capital gain comes when you are selling the assets. When you sell it, it’s a tax gain for the investors to pay. If we take a supplemental loan or refinance in that our terms, then you just give the money back, 100% of it. All that money goes back to the investors who brought us to the dance. We wouldn’t be dancing if our partners we’re not there. I’m really excited to share with you. I raised $7 million in seven hours in this deal.
That shows your success right there.What you want to become one day, you are in the process of becoming now. Click To Tweet
The big thing is a track record. It speaks a lot. I did sell a deal, which I give 26.7% IRR or something like that to my investors and I sold another one. I knew that millions of dollars are going to the investors. They were emailing me and calling me when is the next deal coming. That is the reason also. When you give money back, they want to send it back to you again.
I just wanted to reiterate, you get the supplemental on, you’re paying back the investors investment. If they invest $100,000 and you’re going to hand them $100,000. They’re getting their investment back and it’s not taxable because you’re returning their funds.
Yes, exactly. That’s 100% correct. 100% back or 60% back, it depends. When we cash out or get supplemental, they don’t take it to 80% LTV then, they do it lower down to 70% usually.
Vinney, this is a large acquisition. This is much larger than most syndicators are buying. Operating at that level, what buyer do you plan to have for a property of that size?
I’m glad you said it. We bought this from a very nice group from Boston. They have ten assets. The broker told us that the seller wants to sell us other assets off-market, which is nice. You’re right. I would say these investors have to be who can raise $16 million. We are raising our PPM. We said $20 million just to be sure if any numbers come in, hit in there. You have to have some good strong base of investors. I teach that in my Academy. The syndication world is a great world and everybody should always talk to two to three new investors every week. You figure out a way. If you write down an affirmation, “I am talking to three new investors every week,” and you read it morning, afternoon, evening and you didn’t do it, your subconscious and conscious will bring you in touch with those people. It’s amazing. You’ve got to really put the effort going to meetings and meet ups and starting, going to wealth advisors, going to all these people where there is money, philanthropy, organizations.
The thing is once you write down all the people, the circle of influence who comes to your mind first, that’s all associates, family, friends, neighbors and everybody. Everybody’s got money. We got $25 trillion to $26 trillion in retirement funds just in the USA. Only maybe 3% to 5% is in real estate. Everything is stuck in the money markets and stock markets and this, precious metals or cash in the banks and all that stuff or savings or loans and all. If we can self-direct it and share with our investors, “Let me share with you different avenues.”
Again, I want to educate you. You never talk to the investors that you want money from them. No, never ever. You want to share with them your knowledge, your credibility and everything and how these numbers work as examples. When I get a deal, this is so important, I’m trying to teach that to my students every week. Please do not get a deal and then you look for investors. SEC is ruling against that. It totally is. You have to have the pre-existing relationships before you get to deal with the investors and then you show them the deal and then you ask them if they would like to invest.
I’ve learned time and time again, you never know who you’re talking to. Just at the post office, you’re talking to somebody and internally you’re thinking on this person’s not an investor, but you just never know. You never know who they know. You never know how you can help them and how they can provide value to you or connect you to somebody. You’re always meeting investors.
I’m glad you’re saying that Whitney. I learned this 40 years back because I was in sales and marketing and one of the top consultants in my whole company. I also retained 89.6% or something of my clients from one year to next year to next year. A lot of my clients work with me for 30 years in a row. In other words, every year I was raising money for them. Every year I was raising thousands of dollars, now I raise millions of dollars. The thing is God was preparing me for this. There’s always destiny. What you want to become one day, you are in the process of becoming now. I really believe that. My great mentor and billionaire friend who passed away, Spencer Hays, I like to give tribute to him. He was just a wonderful soul. He called me on my birthdays. He was a founder of many companies. The Tom James Co. is his company, Southwestern, Freeman and all that stuff.
The thing was he said, “Vinney, what you want to become one day? You are incrementally becoming that person. You don’t become that person overnight.” That’s what we want to be thinking about and sending ourselves and giving our affirmations, the power, the Law of Attraction. I believe in the Law of Attraction so whole heartedly, 24/7 it’s working for us whether we want to believe in it or not. If you’re negative, if you’re not thinking correctly, all those things, subconscious and conscious, sends out signals. Those negative things bring more negative things back to us.Do as many deals together you can, but once you can stand on your own, go by yourself. Click To Tweet
That’s what it is. Negative attracts negative in that sense. If you’re positive, you’re sending out the signals, “I want to achieve this.” You would not know how these people will come in your life. That is the key thing. You’ve got to look at one investor, not as one investor, but times twenty. If they spend with you $100,000 let’s say is our minimum, and twenty times, so $2 million, it’s because of their circle of friends. Because of the positive feelings you will bring, the more money you are able to give them, they’re going to tell more people. That’s what has happened in my life. I have 136 investors or so now. It started with zero, then five, then seven, then eight, then fifteen, so everything starts from zero.
You’re definitely not buying a $52 million property overnight. You’re not getting that level overnight. It started with daily affirmations. You’re the most positive person I probably know, so it’s definitely helped you. I think it feeds to people you’re talking to and investing. I love that about you. You’re not moping around all day with your head down.
You want to leave them as a better person. That’s what I tell my students. You got to leave every meeting with a lot of positive, whether they decide or not. A lot of people don’t decide right away. They have to think about it. They have to talk to their spouse, they have to talk to their pastor, their CPA or their attorney. Give them room to digest what you are saying. I like to do Zoom meetings and record them. I send the link back to the investors. I have been doing it for twelve years and they enjoy that. Now with my academy, I even have a motive and my digital director, we look at it, if there is something meaningful, it might become archived into the academy also.
Unfortunately we’re running close on time, Vinney. Is there anything else about this deal that stands out that you’d like to tell the readers that’s maybe unique or that’s something you all are doing differently?
It’s great to become partners with great people. I would like to say I couldn’t have taken it down. Enzo might have been able to, it’s possible. Combining the effort, it’s really brought a lot of synergy into and we are understanding each other and working together and our goals are very similar. That’s exciting. Find a great team player. It’s not a solo game at all. I had it partner with maybe four. We are closing that company down, Ideal Investment Group, the last two properties after the fourteen syndications will be sold. I’m selling those and we are totally shutting down that part of the business. Now we have Moneil Investment, Moneil Management Group and my Multifamily Academy, my educational branch. I’ll be managing three companies. It’s good to build with a strong company, a union, but don’t go into a contract together that for life you’re going to be 50/50. Don’t do that. It’s good to make your LLC and their LLC and then you go into the management side of the property. Do you know that 70/30? 70% is the limited partner and then 30% is in the manager LLC and you come in 50/50 in that.
I know you and I have discussed this a little bit in the past and instead of you being bound together forever, it’s per property then. If it doesn’t work out, you can go onto the next deal by yourself or with somebody else.
I will highly recommend that you should do as many deals together you can, but once you can stand on your own, go by yourself. Why not? Then you have a track record. If everything is working good, it’s because it’s a long-term relationship. Once you are together, it’s going to hold on for five years at least, maybe even seven years. One has to really feel good about it.
You mentioned that you knew the people you’re partnered with or you’ve known them a few years, you’ve seen them operate, you’ve seen other assets they have. That gave you some confidence of how they would operate.
That is a good thing. We were looking for a great investment to come together. We just came and we are making it history within 45 days. Can you believe it? We signed the contract executed on Wednesday. On Thursday, nine people were there from our team and their team. There were seven to nine people. My students got so much excitement because some of them flew in and some were right there in Orlando. They were able to go through into the due diligence and everything. I even invited one student of mine to come there the day I flew in. He was a fly on the wall and he saw us seeing the whole property tour and everything. We took pictures and built relationships with my partners and everything. It’s very exciting too. In my Atlanta property, I like to do property walks as I go there. Students can come in. I don’t charge any money. It’s the same thing in Texas and then now in Florida.
Tell the readers here the best way they can get in touch with you. Tell them all about your academy and then also you have a couple of other big announcements.
Thank you. A lot of people have been asking me, “Vinney, you have been a really positive guy, so would you like to do some motivation show?” I do like that. I do a Facebook Live at 10:00 AM. It used to be a syndication show, but now it’s motivation and syndication show that I do. It’s a Facebook Live for 30 to 45 minutes every Friday at 10:00 AM Pacific. Vinneychopra.com is the best place. My business adviser, Jon, you can reach him at Jon@VinneyChopra.com. The three great announcements are I’m starting my own podcast show where I’ll be the only guest. I’m sorry. I’ve been busy with so much stuff. It’ll be hard for me to manipulate different guests and all, so I’m starting with myself only. It’s Mr. Smiley’s Motivation Talk Show. It’s a weekly show. I’ve recorded six already and we’re going to launch it. My promoter’s the number one seller in the USA of books, videos and everything. She’s promoting.
Alicia is my co-host in the show and then we have crushed six of these shows, so they’ll be launched six at a time very soon. The press release just came out all over. The second show is Syndication Made Easy. I’ll be bringing golden nuggets and answering questions and everything for the students. That’s my Syndication Made Easy, which will also be in the book and Kindle edition, which is coming up, My Journey From $7 to over $250 Million, which will be about close to $300 million now. That is the third thing. The book and Kindle edition and an audio version will be coming out.
I assume that they’ll be able to find the podcast and the book on your website?
Correct. Everything will be there.
Vinney, thank you again. It’s always a pleasure to have you and share your expertise. I appreciate the audience for being with us and I hope you’ll go and leave a rating and review and then also go to Life Bridge Capital and connect with me. I’m happy to help you in any way I can. Go to our Facebook Group, The Real Estate Syndication Show, so we can all learn from experts like Vinney and grow our businesses together.
- Vinney Chopra
- Enzo Multifamily
- Moneil Management Group
- Multifamily Academy
- The Real Estate Syndication Show – Facebook Page
About Vinney Chopra
Vinney (Smile) Chopra, a founder and Chief Executive Officer of 3 companies and President of 2, came to USA with $7 in his pockets. He has over 35+ years of Real Estate experience and 15+ years of Multifamily Syndication Investing & Managing experience including overseeing the management of $220 Million in real estate assets. MONEIL PREMIER COMMUNITIES are all Self-MANAGED by Vinney’s well trained 67 full-time professionals along with thousands of contractors and vendors!
His expertise includes picking right markets, underwriting well, raising $5 million to $8 million in a couple of days, negotiations for Win/Win/Win, driving corporate growth strategy, investor relations and asset management, and business & culture development.
Vinney is passionate to coach and mentor and teach his skills to other investors so that they don’t make the mistakes he made. Vinney has an undergraduate degree in Mechanical Engineering and a Master of Business administration degree from The George Washington University. He lives near San Francisco, married 39 happy years to Kanchan and have two great grown-up children.
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