TGCI 124: Expanding into multiple asset classes with strategic partnerships

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Episode 124: Expanding into multiple asset classes with strategic partnerships

Copy of EP #18 - 2 Guests

Summary

In today’s show, Pancham interviews Mark Khuri – founder of SMK Capital Management.

Investing definitely runs in his blood as he has partnered with his brothers, cousins and has co-founded SMK Capital Management with his father. With his 15 years of real estate investing experience, he has managed over 40 partnerships, invested across different asset classes and has invested in over a billion dollars of real estate value!

In this episode, listen how he has built his investing career during the Great Recession, how his investing strategy has changed over time, his unique way of diversifying his assets, and where he focuses his business today!

Listen and enjoy the show!

PanchamHeadshotTGCI
Pancham Gupta
Screen Shot 2021-05-07 at 1.23.17 PM
Mark Khuri

Tune in to this show and enjoy!

Copy of Quote #00 - 1 Guest

Timestamped Shownotes:

  • 0:47 – Pancham introduces Mark to the show
  • 2:03 – Maximizing opportunities and investing during the Great Recession
  • 5:24 – On making the switch to be a full-time investor
  • 8:39 – How he structured his winning business model
  • 14:34 – Switching goals: from high-risk to low-risk investments
  • 20:33 – How he predicted the market and shifted to recession resilient assets
  • 23:31 – His simple but efficient morning routine to be productive
  • 26:16 – Taking the Leap Round
  • 26:16 – His first investment outside of Wall Street
  • 27:36 – Overcoming his fear of being uneducated
  • 28:33 – How he dealt with his duplex investment being on fire
  • 31:22 – Why investors should also look at the worst case scenario and work with the right people
  • 33:17 – How to get a free copy of Mark’s report

3 Key Points:

  1. Keep on learning – through books or networking – before investing in order to have background knowledge.
  2. Creating multiple partnerships in different asset classes is another way for you to create diversification.
  3. Focusing on low risks yet attractive yields has helped him focus on his goal of income and growth.

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Read Full Transcript

Welcome to The Gold Collar Investor podcast with your host Pancham Gupta. This podcast is dedicated to helping the high-paid professionals to break out of the Wall Street investments and create multiple income streams. Here’s your host, Pancham Gupta.

Hi there, I’m Robert Helms host of The Real Estate Guys radio program and if you want to have better results in your life you gotta put better ideas in your mind. You’re in the right place. You’re at The Gold Collar Investor podcast.

Pancham Gupta: Welcome to The Gold Collar Investor Podcast. This is your host, Pancham. Really appreciate you for tuning in today. We have a great weather here in New York, middle of April, and it’s bright sunny day. Today, we have Mark Khuri as a guest on the podcast. Mark Khuri brings over 15 years of real estate investing experience to the organization. His career started in 2005 when he began investing in residential real estate in California and Florida over the last decade. Mark and affiliates of SMK have invested in over 45 commercial real estate opportunities across numerous asset classes including mobile home parks, self-storage facilities, multifamily communities, retail shopping centers, oil well, student housing, vacant land, short term debt, and ATMs. Prior to founding SMK Capital Management, he was the vice president of sales and operations with a private retail distribution firm and Mr. Khuri work as a financial analyst with the fortune 500 company performing budgeting, planning and internal audit roles. Hey, Mark, welcome to the show.

 

Mark: Thanks, Pancham for having me.

 

Pancham Gupta: Thank you for connecting here. I know we’ve been rescheduling it multiple times to finally,  great to get you here on the show. So, before we get started, are you ready to fire up my listener break out of Wall Street investments?

 

Mark: Yes, let’s do it. 

 

Pancham Gupta: Great. So, Mark, tell my listeners about your background, and more importantly, the person behind that background.

 

Mark: Sure. So, I started out in corporate America as a financial analyst for a couple years, various roles budgets and planning, a little internal auditing, analysis, of course, a lot of spreadsheets, which helps today with real estate investing. I also shifted over and worked in a different role in operations management and logistics staff helping a company expand their operations to the west coast. And, you know, I found that finance and operations meshed well with real estate investing. And I started investing on the side, you know, after work, go into Home Depot, very active hands on owning, taking all the risk, and making all the decisions, of course. I did that for a number of years, started partnering with family members, my brother, my father, some cousins. They were always passive, and myself and then my father, were the decision makers, right, making all the calls on what to buy, how to renovate it, what to do with the assets, etc. and we did that actually through the recession. 2008-9, you know, we saw kind of opportunity in the marketplace in 2009-ish. I decided right around then to leave corporate America and really expand on what we were already doing as a family with real estate investing. And so, we created our company, my father and I partnered together. He is a retired orthopedic surgeon by trade and real estate investors since, gosh, the 70s. And so, he’s now retired and lives in Florida, where my folks are and plays golf and bridge and so, but you know, about 11-12 years ago, we were very heavily invested together, time and efforts and strategy. And we still work together daily, like he’s less interested in operations, just to put it lightly. He likes more strategy and oversight. And so that’s how we got started. And then we’ve just expanded over the years. Today, what we are is a private equity real estate investment company. We source and structure investment opportunities for passive accredited investors. We focus on diversification across asset classes, regions, and operating partners. And so, we love mobile home parks, self-storage, Class B workforce apartments and ATM investments, really looking for passive income and growth. And we’ve created and managed over 40 partnerships over the years with investors and invested in over a billion dollars of real estate value. And so yeah, that’s a bit more about us.

 

Pancham Gupta: That’s great. So that’s a great background. Going back to your W2 days, you were in finance and then you were in logistics and you expanded for the company and right around 2009, were you in California?

 

Mark: Yeah, I was in California. First property I bought was in 2005 and then took out a line of credit on that, you know, at the time, everything was just going up into the right. And so, there was a lot of equity that you could take out and get that and bought another place. We partner, my brother on a four plex and just kept going from there.

 

Pancham Gupta: I see. So, you know, what was it like going back to those days if you remember that, you know, you had this great job and you were doing this on the side, what was the thing that made you actually switch to this full time? I know your dad was he said he was investing since the 70s so I’m sure you saw him doing this as you were growing up, right. So, it was not something new to you. So, I’m sure you had that at the back of your mind. But walk us through like What went through your head?

 

Mark: Sure. Yeah. There’s a couple things I remember that stick out today that I think were you know, pivotal moments, I’d say, one I was 22-23, Pancham, you’re young and full of energy and creativity, but not much experience, right. And I was in a meeting, it was 10 o’clock at night working in a finance job at the time and we were in a boardroom and there was four of us in the room, I believe. One of the coworkers at the time was probably where I am today. I’m 40 today. And so, he was around my age had been with the company for almost 20 years, highly regarded. You know, I looked very much up to him. He’s one of the sharpest guys in our department at the time. And I just remember wondering, what the heck is he doing here with me? You know, why are you sitting here with me at 10 o’clock at night, on a Tuesday, you’re married, you’ve got kids. And it was just a bit of a wakeup call, right, Pancham,  that could be me in 20 years. And while he’s well respected and regarded, I just started thinking maybe there’s a different path.  Went down a little bit of an educational rabbit hole and started reading a bit more about how to create wealth and financial freedom. And they obviously one of the big books that most of us find in that journey is Rich Dad, Poor Dad, which was great, very eye opening. And there was another book that was just briefly mentioned in there that most people, I don’t think picked up on called the 16% solution, which was all about tax lien and tax deed investing. And so, it was like I maybe mentioned just one sentence, almost like kind of hidden in the book, if you will, right. And so, I went read that one too. And it just kept going. And so that’s kind of how I expanded.  It was really by education first and reading and learning. And then further on, it was really meeting people and networking in person. And went for about two years in Los Angeles, I went to a ton of real estate investment group meetings, and really got a lot of contacts and built my network that way to opportunities. And a lot of those are still with us today. And some of our greatest relationships came from that time. So that’s a better way. I shifted and pivoted along the way.

 

Pancham Gupta: Got it, you know, 2009 was, we were just coming out of the crisis. And if you had talked to anyone about real estate at the time, they were like, Are you out of your mind? You know, there is a biggest crash that just happened because of that, and because of all this stuff. So, but you know, you had your dad guiding you. So that was definitely something that was great. I’m sure he had seen many cycles like that in his lifetime. So, he saw the opportunity and that’s great. So, you mentioned something about the multiple asset classes that you’re focused on and your finance and the operations and you also partner with different operators, you have mobile, home parks, cell storage, ATMs, et cetera, et cetera, right. So, all these things. So, your company does a manage all of these different kinds of asset classes, or you actually have operators who actually manage these annual partner with them.

 

Mark: Yeah, so we’ve evolved over the years , Pancham.  We started out being the sole source for operations and actively managing our own investments with our investor partners. And so, we would find the properties we would source them we’d underwrite them, we would raise the debt, secure it, hire the property managers oversee them, the contractors, everything from A to Z. We built up a portfolio of single family and small multifamily properties around 50 or 60 properties in a few different regions of the country. But by 2015, we started seeing that some of the cream I would say of the low hanging fruit of acquisition pricing. We’re starting to thin out, you couldn’t just buy in for the same price as you could five years before.

 

Pancham Gupta: You can say the same thing now actually for the five years from that time

 

Mark: It’s exactly true, yeah. So anyway, we started kind of pivoting, we’re already investing, you know, personally with other asset classes. And that’ll kind of explain, you know, how we got to where we are today, organically. But when I left corporate America, started my own company, I had a 401k that was matching previously. And then once you become self-employed, you know, forget it, that doesn’t happen anymore. So, I needed to find something to do with those dollars and I opened up a self-directed IRA, and then part of that networking, I went out and started looking for investments that had done well through the downturn, right, we were talking just 2010 and 11. They’re still performing. What, what else came I invest in personally and diversify myself into that has done well in the last couple years at the time and mobile home parks just kept popping up, and the thesis behind them and the strategy and some of the data and self-storage as well. And so, I started investing in those asset classes passively, as a limited partner in larger institutional quality offerings. and learned and did it again and again, and again, and my father as well. And until about that, we did about 10, or 11, different asset classes, Pancham, over the years. And we started building relationships, so our operating partners had another opportunity and so we would invest again and again with them. And it got to a point where he said, geez, I think this is an opportunity to possibly offer our investor group access to some of these relationships we’ve built , some of these deals. And so, we did that.  We created a syndication in a mobile home park fund, our investors participated in it. And we went to our experienced operating partner that we had been working with personally for a few years and created an LLC that our investors would fund into and get access to that operating partner and are experiencing and that opportunity. And so that’s where we’re at today. That’s essentially what we’ve evolved to, we stopped buying single family and small multifamily, and being the operating partner in about 2018 or so. And we’ve shifted, and we’ve been doing it gradually for a number of years, but we kind of that was our last one. And we we’ve only focused on commercial , institutional quality, recession resistance for you know, three, four years now. And that’s by handing over control on purpose, to a best in class operating partner that, you know, does one thing very well, right. And so, I always wanted to invest in mobile home park, but I didn’t know exactly what I didn’t know, right? How do you operate it and manage it effectively, efficiently, etc. And so, by giving up that control to very experienced people who just do that, for example, have done that longer than, you know, then we can think of, we felt pretty comfortable, we tested it. And that’s, that’s essentially our model today, where we give up that control and create a partnership with folks that are really good at one thing, and then we can do that again, and again, across several different things and create diversification.

 

Pancham Gupta: That’s such a great way to put it right? Like, you know, you give up control. But you know that these are great investments, you bring your investors alongside you and do it. And that’s essentially what the syndication is all about, right? Like, you know, whether if you are that one guy who knows how to do those things, and they invest with you, and in this case, you’re taking them to those people who actually have that knowledge. That’s great. So now that you’ve shifted to this model, since 2018, do you still have stuff which you’re actively managing? Are you completely done with those projects?

 

Mark: Yeah, we do have some, Pancham but we’ve actually sold a lot of properties in the last two years. 

 

Pancham Gupta: Good for you, 

 

Mark: Because that, you know, we bought with a three to seven year hold period projection. And we had a projected resale valuation amount, of course, and we’ve had all those valuations in that time period. So, we really just decided to execute on the original business plan and sell when we had to anticipate it to, so we bought low, we bought, right, we carried and held through the downturn, and the equity of course has been achieved. So, we still have some that will keep long term, Pancham but we’ve sold a lot of a lot of the active holdings, I’d call it today. 

 

Pancham Gupta: Got it? Got it. So, you know, I want to shift gears is it you know, maybe you can talk about the numbers, you can pick any deal, as an example. Our listener is actually very analytical minded. So, you know, if you have, when in, take example of a deal where you were actively with the operators, for example, right. And kind of returns you were offering the investors versus now that you are, you know, partnering with other operating partners and kind of returns the investors are getting so that they can, you know, compare?

 

Mark: Sure. Yeah, let’s think so I’ll compare. Maybe I’ll look at a flip. We’ve flipped a lot of houses over the years actively. There are different cash flow and income streams, different returns, different risk reward levels but let’s compare. So, thinking of a flip we did in Ohio, we purchased a home and don’t quote me on the dates, exactly, Pancham , but maybe we bought it in 2015 for $45,000, okay. And you might say, well, why would you ever buy a house for that cheap? How do you do that? Tell me more. And there’s plenty of areas in the country where you can do that. But this was a distressed bank owned, it had been vacant for almost two years, as a foreclosure, we had to pay all cash, and it needed another 45 to 50,000 renovations just to get it habitable and become occupied. So, we bought it, we renovated it. Once they were all laying around 100k. And I think we sold it for 165, give or take all within 12 months. And so, for our investors, they were in a short term deal in and out within 12 months, there’s no cash flow along the way, right? Because their passive and there’s some income, it’s not rented. But when we flip it, they get all their principal plus, I think we might have had 30% return maybe 40% in less than a year

 

Pancham Gupta: Is this a fund or is an individual deal?

 

Mark: That  one was an individual deal. We’ve created funds, we’ve done one offs, we kind of do both just depends on ebb and flow of deals. So that was a higher risk, higher return investment. And today, you know, kind of what we focused on is lower risk, but still a very attractive yield. And we want to income and growth. And so, a little different, but to compare, nonetheless, active versus passive. And so today, you know, what we’ll focus on is give you an example, we have an operating partner, based out of Austin, Texas, which is one of our favorite markets in the US, but very hard to find deals today, that pencil there from there, they know the markets, they operate there. And all they do is Class B workforce housing, stabilize that acquisition, typically 90%, or more occupied when you buy it with a very strong value add business plan where we can come in and improve operations, grow revenue, reduce expenses grow NOI. And they do that and nothing else. And so, when they have a deal, they’ll come to us say, Mark, we got a live one, I’ll give you some numbers, Pancham, let’s say it’s $50 million acquisition 300 units, they might source the debt for 30 million, and then they need equity of 20 million. Okay. So then between their own capital, their investor network capital, they might have 10 million, and then they need another 10 million. So, they might come to a group like us SMK and say, hey, do you guys want to participate, we have 10 million available. And if we like them, we like to do , we’ll structure it will create an entity, and we’ll invest in a portion of the remaining 10 million available. That’s kind of how it works. And so, but what do we look like for returns, we want our investors in that type of investment, where we’re going to come in and renovate the units and add additional income streams to the asset and grow NOI. We want our investors to earn income day one. So, if we buy it, and we do nothing else, just buy it and close, we’ll start earning distributions within three to six months, typically. And so that’s part of our downside protection. Because of the volatility in the marketplace. last few years, we want to buy stabilized assets that have in place income, that’s one step. But we’re looking for yield to investors who want to provide our investors three to 7% cash on cash beginning in year one. And then we want that to grow as we’re continuing to do value add improvements to the asset, we were looking for typically seven to 12% average cash on cash from the rental income while the hold. And then when we sell it, we want to have the profits added to that distribution income, equal 13, 17% average annual return to our investors today. That’s where we feel the sweet spot is for the amount of risk that we are comfortable with. And still without sacrificing too much upside. So that’s a bit a bit more of kind of a profile of the kinds of deals we like today, Pancham. We’ve been doing this with the same strategy for a number of years, but we’ve reduced our expectations of returns in the last two years on purpose because of where the markets been going. Investor demand, cap rates, you name it and so, but we haven’t changed our strategy and our kind of our risk profile.

 

Pancham Gupta: Got it. Cool. Now, that’s a great summary.  And how given that you’ve invested in so many asset classes now, is there any favorite you have?

 

Mark: Yeah, I’d say it’s mobile home parks were kind of number one. So many reasons I could talk about, we’ve been invested in them me personally, and our company started in 2011, or 12. And so just watching the evolution over, you know, the last 10 years or so it’s been quite interesting to say the least. But at the end of the day, the fundamentals, the thesis, the projected returns, the actual returns are still some of the most favorite. 

 

Pancham Gupta: Awesome, great. So now that we are coming out of COVID here, and you know, last year was quite crazy one, given all these investments. So have you changed your focus, or it’s still the same, because of COVID,

 

Mark: We haven’t changed. So, in 2018, we made a pretty big shift to focus on recession resistant investing, asset classes and strategies within those asset classes that have a high likelihood of continuing to perform through a downturn, there was a lot of signals in the marketplace, both macro and on the street level, I’d say that showed us that there was a potential for a correction coming soon. And so, we positioned ourselves for that. So, we created a recession resistant fund in 2018, and 2019, which had a very specific goal of resistance and resilience to a potential downturn, the combined mobile home parks, self-storage facilities, and Class B apartments in growth markets together into one investment offering. And we closed that investment in Q3 of 2019. And sure enough, no recession, Q1 of 2020. And so funny how that worked out. timing was interesting. But nonetheless, in 2020 when COVID hit, of course, we stopped investing on purpose. We waited, we watched, we monitored, we analyzed, we just kept gathering data and our own portfolio or operators, portfolios, and macro as well, because nobody knew what was going to happen, Pancham, you know, it’s a year ago, give or take now, a little over a year, but it’s never happened before, right where the economy shuts down overnight by flipping a switch. And so, nobody knows what’s gonna happen. There’s a lot of fear in the marketplace. And so, we just waited, we only did one investment in 2020. And that was into an apartment deal in Q3, that was a bit of a no brainer for us at the time. 

 

Pancham Gupta: Which market was it?

 

Mark: In Phoenix, 

 

Pancham Gupta: Phoenix , Great.   

Mark: It was great if you can find deals that pencil there. But today, you know, we haven’t changed since 2018, we’re still invested in the same asset classes, the same strategies. The only difference I’d say is we’re more conservative than we even were before with underwriting projections and assumptions. If we have a potential lease up value add plan, or if we’re going to project occupancy or economic occupancy, we’re always going to pad the numbers and pretended just assume it’s going to take longer, and things are going to be worse than what you hope. And so that’s a bit more about how we’re adjusting after four quarters now of data behind us. But all in all, residents continue to stay in pay. occupancy is, is great, most of our assets are over 90, 95%, occupied and collected. And so, we’ve seen the resilience thus far with what we’re doing.

 

Pancham Gupta: Cool. Cool. No, that’s great. So, you know, I have my last question before we move on to the next section of the show. And that question is, do you have a morning routine that you follow? And if so, what is it and do you think that attributes to your success,

 

Mark: Cash, uhm.  I don’t really have anything specific, Pancham. I’ll tell you what I do is not interesting, but I drink strong black coffee. And I get to work within about 15 minutes of when I wake up. And so that’s what I do. I don’t typically eat until 10am. And not because I’m trying to do intermittent fasting just because I don’t get hungry. But that’s about it. I just you know, I like the mornings, typically an early riser just by trade and nature. And I’m the sharpest in the morning and so I just want to get going. That’s how I work. 

 

Pancham Gupta: That’s great.  Short and simple. Sounds good. We’ll be back after this message… Do you ever feel overwhelmed by the thought that you have no time after work and family time to learn about investing? Do you feel left behind that you are not putting your money to work for you? Do you want to create passive income, but you do not know where to start? If so, I have good news for you. I have created an investor club which I called The Gold Collar Investor Club for accredited investors. I will be putting together investing opportunities exclusively for this group. These are the opportunities where I I’ve done my part of the due diligence for you, and we’ll be investing my own money alongside you. If you are interested, please sign up on thegoldcollarinvestor.com/club, I repeat, thegoldcollarinvestor.com/club.  I will reach out to schedule a 30 minute phone conversation to discuss your investing goals once you sign up. This can be a good opportunity to diversify and take some chips off the hands of Wall Street to produce some cash flow. And in case you are wondering, what is an accredited investor, accredited investor is someone who has earned more than 200,000 as filing single or more than 300,000 filing jointly for the last two years. Another way to qualify as an accredited investor is if your total net worth is more than $1 million, excluding your personal home. It includes your stocks, 401k’s, IRAs, cars, etc. Just not the equity in your personal home. If this is you, I would highly encourage you to sign up… So, Mark, let’s move on to the second part of the show which I call taking the leap round. I ask these four questions to every guest on my show. My first question for you is When was the first time you invested outside of Wall Street? Was it in 2005?

 

Mark: It was in 2005. I bought a condo .   It was a probate auction. I had no clue what I was doing. I thought I already owned it and I didn’t. And so, I had to go to court. And sure enough, I was there with my real estate agent who I also don’t think knew what he was doing. And the judge offered the condo up for bid to other people. And I said what is going on here? I thought this was mine. And two people raised their hands. They had more money than me and we’re ready to buy it for more than they congregated at the judge’s desk. I couldn’t hear what they’re saying. But I’m not sure what happened. But I ended up getting it, Pancham and they basically told me that there was folks checks were made out incorrectly, their deposit checks, and so they couldn’t accept them. And I’m in the elevator leaving and sure enough, one of the guys with the checks standing next to me. He says, oh, you’re that kid that got that condo, you got such a great deal. And I you know; I’m so confused about the whole process. And I just say yeah, thanks. you know, awkward moment. Yeah. So, I, I’ve just been hooked ever since then. Yeah.

 

Pancham Gupta: Got it. Got it. Cool. That’s a good story there. Okay, so what fears did you have to overcome when you first invested in that deal, the first probate condo?

 

Mark: Yeah, I think, you know, I approached it in a way where I lived in the place. So it wasn’t that much of a risk, in a sense, because it wasn’t necessarily for an investment, although it turned into it. And it was my home. So not too much fear in that one. I will say like, in general, a lot of the stuff we bought early on was quite distressed physically. And so, all the fear was around how do I fix this up? You know, and how do I hire contractors and manage the whole process and not go over budget and over time, etc, etc. So that was more of a fear. And I overcame that just by working my butt off, you know, just not quitting going there every day after work, going to Home Depot, and talking all the people that work there asking question learning, and just go into about 100 miles an hour or so.

 

Pancham Gupta: Got it, cool. So, can you share with us one investment that did not go as expected?

 

Mark: Yeah. So, I, I’ll share with you a story about a duplex in Florida that we had bought. It was fully rented. And then we were just holding it as a rental property. And I got a call from my property manager. And he says, Mark, we’ve had a fire. I thought he was joking, honestly, Pancham, I started laughing. Really What’s going on? He said, No, no, no, this is serious. I’m adding to the property right now. I think the tenants are okay, but they had to climb out of a window. Oh my god, what’s going on? And so sure enough, what happened was the, there was a side by side duplex, single story, and the tenant on the left side’s car, just spontaneously combusted while it was parked in the garage, Pancham, went up in flames. And they’re inside eating dinner with their kids. And they literally had to climb out the kitchen window to get out of the house because it was burning. And so, we had a total loss, in essence where the fire , hey I can ship, send your picture. It’s scary if you see what happened. But he burned the place down almost to the ground, not completely because it was relatively new construction, I think was built in 2007 and burned in 2012-ish. And so, there was a very nice, strongly built retaining wall between the two units in the garage and the fire could go through that. But it went over it. 

 

Pancham Gupta: Oh my god. 

 

Mark: Yeah, so it’s a bit scary to say the least. So that didn’t go as we expected. And we were properly insured, we had loss of rental income. And so, we continue to receive the rents even though the house is inhabitable for six to eight months, while we figured out what to do with it.  We hired an insurance adjuster, privately, on a power of attorney, just performance based to go out and fight with our insurance company for us. And I’ll tell you right now, if you ever have a total loss, don’t do it yourself, go hire someone to do it on your behalf, because they’re going to get you a lot more money. The insurance is mandatory, it’s required, it’s necessary. But I learned through that process that they’re not necessarily going to give us what we believe it’s worth. And so, it’s better to have a third party assist you. And that’s what happened, we ended up getting a very large lump sum for the property, we ended up deciding through a vote with my investors to just sell it as it, so we sold it. After receiving the investment paid out for the fire damage. Of course, we sold the property for $9,000 to a rehabber, and walked away from the deal. 

 

Pancham Gupta: Well, you do, and you learn. 

 

Mark: That’s right. 

 

Pancham Gupta: So, all right. So, my last question for you is what is one piece of advice could you give to people who are thinking of investing in main street that is outside of Wall Street?

 

Mark: Okay, sure. I try to  think if there’s just one, but maybe there’s two that are tied together. So, you know, if you’re looking at opportunities and investments first, you know, it’s so easy to paint rosy projections, Pancham, you can go into an Excel pro forma, in 10 minutes, I can change the returns to make them look higher, you know, it’s not that difficult. And so, we watch out for that. That’s literally what we look for regularly. And so, with that being said, you’re going to want to look at, you know, of course, the projected returns the best case scenario, but also what’s the potential worst case scenario? Well, people don’t think that they see, you know, 18, 20%, returns policies, great, let’s go. But you really want to protect your downside. And so, you know, Warren Buffett’s number one rule about investing is don’t lose money. And number two rule is don’t forget rule number one. So, keep that in mind. Look at your downside, look at the worst case scenario and trying to find out if the deal is being conservatively underwritten, which goes in hand with kind of the next point of advice I would make, which is, you know, be patient, you know, don’t just jump on the first deal or two that you see, because, you know, they look, okay, you know, work with a high quality team. If you’re going to go into the private real estate investment space, it’s all about people, who are the people that are involved, that you’re partnering with, and align yourselves with the best of the best. That’s one of my biggest learning lessons over the last, you know, 10,15 years doing this is to just be with the right people and play the long game. You’re not gonna get rich quick doing this, but it can provide a very exciting lifestyle and financial freedom in time.

 

Pancham Gupta: Great, thank you for that advice, Mark. And I know you’ve put together a great PDF eBook for people who can talk about like which talks about navigating passive investments in the post COVID world. So, you know, talk about that what it talks about, and you know, how can people get it?

 

Mark: Sure, yeah, it’s something we put together now, because I think there’s a lot of need for it in the marketplace. But essentially, what it is, is just five steps to best position your capital today as an investor. Those five steps are summarized, some lessons we’ve learned over the years are involved in there and added there, what to look out for what to watch out for. How to diversify, you know, location, people, deal analysis and underwriting and understanding kind of the bigger picture view of what the operators doing and why they might even need your money in the first place is part of it. So yeah, we put that together, and folks can get it. Just send an email to smk@thegoldcollar investor.com

 

Pancham Gupta: Great. Thank you, Mark. How can people connect with you if they want to connect with you LinkedIn, Facebook,

 

Mark: Yeah, LinkedIn is great. You can look me up. My last name is spelled k h u r i, first name is Mark, you can go to our website, which is smkcap.com. That’s our company name is SMK Capital Management, and you can email us at info@smkcap.com. We’ve got a lot of information on our website, Pancham, investment opportunities, examples, some of our thoughts on what to do, how to do it, etc. And so, I’d suggest folks start there and then reach out and see how we can help 

 

Pancham Gupta: Awesome. Well, thank you, Mark. And again, listeners, if you’re interested in that guide, go to email smk@thegoldcollrinvestor.com.  Thank you Mark for your time and knowledge here.

 

Mark: My pleasure, Pancham. Thank you for having me today.


Pancham Gupta: Thank you. I hope you learned something from Mark’s experience. Thanks for listening. I appreciate you for tuning in today. If you would like his report, do email at smk@thegoldcollarinvestor.com.  If you have questions, email me at p@thegoldcollarinvestor.com, that’s again p as in Paul @thegoldcollarinvestor.com.  This is Pancham, signing off.  Until next time, take care.

Thank you for listening to The Gold Collar Investor Podcast. If you love what you’ve heard and you want more of Pancham Gupta, visit us at www.thegoldcollar investor.com and follow us on Facebook@thegoldcollarinvestor. The information on this podcast are opinions as always, please consult your own financial team before investing.


Copy of EP #18 - 2 Guests

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