Neal Bawa is a technologist who is universally known in the real estate circles as the Mad Scientist of Multifamily. Besides being one of the most in-demand speakers in commercial real estate, Neal is a data guru, a process freak, and an outsourcing expert. Neal treats his $1 billion-dollar multifamily portfolio as an ongoing experiment in efficiency and optimization.
Episode Highlights Here:
Brett
I believe that God gave gifts and gave us to be a blessing and help to others. So talking about how you’ve taken that gift and your blessing and help to others as it pertains to multifamily investing. And in particular right now, you talked in the best ever real estate conference here a month ago on stage about the challenges that are ahead and or right now with those who over leveraged and didn’t diversify and maybe overpaid for properties when maybe they shouldn’t have via the 1031 exchanges or just were a little bit overextended on some of these these investments and what’s happening right now according to those numbers that you talked about.
Neal
So, you know, knowing math, right, and understanding math gives me a better look into the future. Perhaps it gives me 612 and 18 months, but personally for myself, it gave me the ability to look at When I would retire, and I was absolutely unhappy with what I saw there, I live in Texas Fornia. I was a a technologist with a massive salary. But I wasn’t keeping much. I was basically just giving it to the man, they were years when my tax bill was 53.4%. So 53.4% of my salary was going to the IRS. So I felt like when I projected this forward to retirement, I didn’t I the all the comforts and the money that I’d gotten used to. I wouldn’t have that at the point of retirement, I would basically have to drop my level of living. And so I was like, what is going to prevent me from doing that? Well, the first thing was taxation. And so I went around asking lots and lots of questions, doing lots and lots of math on taxation. And it became obvious to me that real estate was basically just different from any other thing. The only other new area in which I see the same benefits is oil. But oil is very risky. When my math brain does the risk on oil, the risk reward doesn’t work out. So I started doing real estate and I did real estate for 10 years, as a technologist, using my own money, I bought dozens of homes for myself and my family got to the point where my taxation was under control. And that allowed me to make investments that I wouldn’t have made until 10 or 15 years later in my life, because the money was going to the IRS. Well, now I was basically investing in real estate, not paying taxes, then using that money to invest more in real estate. And I basically got to the point where at the age of I think it was 39 and a half, I had got I’d replaced a technology salary of over $300,000. And so when you replace $300,000, with passive income, it changes your life, it changes everything that you see. And so I said, this is something that most people don’t know, I see all these technologists, folks, they don’t understand that they’re basically just working for the man. And they will take a massive hit as they get older, or as they lose their job to their standard of living. And I became convinced that after 10 years, I’d learned enough and I wanted to share it with other people. And that’s why I stopped. I created a course on a website called udemy.com. There’s 11,000, you know, nerds taking that course right now. It’s real estate, data science. And it allows you to pick the best cities in the United States. For real estate investing, you can pick any two random cities and immediately rank them in order of which one’s better for real estate profits. And that course I mean, I thought maybe 100 People would take it. But as I said, there’s 11,000 People taking this course. You type in UD Emy space, Neil Bauer, and you’ll see people taking it, it’s got over 1005 star reviews. So I think there’s people like me out there that see the magic in numbers and what it can produce for your lifestyle for your children. For just happiness. I mean, money matters when it comes to happiness. And I just do you know, I just rank everything on the basis of happiness. And I find that money is really up there in terms of what creates happiness. And so today, I have 1000 investors. They’ve invested 280 million with me, and I bought a billion dollars in multifamily. I’m giving them lots and lots of depreciation, which is knocking down their taxations and getting them profits. But I’m also using numbers to not engage when I shouldn’t be in the last two years, my peers bought six to eight properties. I bought one, because I could see that the mathematics was not working. So this conference that you and I met for the first time, you know, we’ve talked many times. We met in person, I was presenting my presentation in my presentation called Crisis Bootcamp, how to save your property, because people are basically overpaid by 30 or 40%. And now I’m using math to show them how to save their property so that their investors don’t lose all their money.
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About Neal Bawa
Neal Bawa is CEO / Founder at UGro and Grocapitus, two commercial real estate investment companies. Neal’s companies use cutting edge real estate analytics technology to source and acquire OR build large Commercial properties across the U.S., for over 800 investors. Current portfolio over 4800 units, with an AUM value (upon completion) of over $1 Billion.
Neal shares his team’s unique and cutting edge real estate data methodologies to connect with geeky and nerdy (or just data driven) investors who share his vision – That Data beats gut feel by a million miles. Over 10,000 real estate investors have taken his free Real Estate Data Analytics course on udemy.com and the course has over 1000 five star reviews.
Neal speaks at dozens of real estate conferences across the country and virtually, on the Internet. Over 5,000 investors attend his multifamily webinar series each year and hundreds have attended his Magic of Multifamily boot camps. His facebook and meetup groups have tens of thousands of investors.
Neal believes that we are at a turning point, where traditional commercial real estate will combine with Proptech and Fintech technology disruptors, and will truly reach it’s potential as a tradable, highly liquid asset class that will rival and eventually beat the stock market in its size and scope. He also believes that the Build-to-rent will become a much larger and more profitable part of the Multifamily asset class over the next 5 years, due to its uniquely desirable characteristics. Neal’s vision is to combine the Build-to-rent asset class with fractionalization to democratize commercial real estate.
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