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  • Leveraging Land for Lucrative Deals: Igor Shaltanov’s Real Estate Investment Strategy [Ep194]
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March 19, 2024

Leveraging Land for Lucrative Deals: Igor Shaltanov’s Real Estate Investment Strategy [Ep194]

Today's episode features a fascinating conversation with Igor Shaltanov, a seasoned real estate investor with a portfolio boasting involvement in 3,000 units and numerous ground-up developments. Igor pulls back the curtain on the intricate world of land investments and the rapid shifts in multifamily property strategy. From the trials and triumphs of transforming a hotel into sleek apartment studios to assembling land parcels for impactful housing developments, Igor sheds light on the in-and-outs of navigating city relationships, handling permits for swift project launches, and overcoming construction challenges. We'll discuss the nuanced decisions within the funding landscape, the insights learned from launching a fund of funds, and strategies for bracing against fluctuating interest rates. Join us as we dive deep into the gritty details of leveraging land for real estate investing.

Episode Timestamps

  • 00:00 Pursuing real estate development for higher returns.
  • 04:29 Combining 5 parcels into a more valuable property.
  • 07:33 Responsibility for neighborhood infrastructure and development process.
  • 12:36 Land deals have low cash outflow, various strategies.
  • 16:27 Experiences with building construction and contractor issues.
  • 18:55 Discussion on financing and time frame for project.
  • 22:04 Partners, syndicators, leverage, fixed rate loan options.
  • 29:55 Oakland's Jack London Square: Growing, scenic, and promising.
  • 32:28 Problems in construction lead to unexpected results.
  • 34:04 Polo player turned real estate investor.

Episode Table of Contents

  • Leveraging Land Assemblies and Entitlements for Real Estate Value Creation
  • Land Investment: Lower Costs, Higher Returns
  • Leveraging Land for Investment Diversification: Igor Shaltanov's Fund of Funds Strategy and Overcoming Investor Skepticism
  • Leveraging Land for Secure Investments Amid Current Market Challenges
  • Leveraging Land Investment Strategies and Benefits of City Collaboration for Real Estate Development

Leveraging Land Assemblies and Entitlements for Real Estate Value Creation

Leveraging Land Assemblies and Entitlements for Real Estate Value Creation
Photographer: Gautier Pfeiffer | Source: Unsplash
Discover How To Save Taxes and Build Wealth

Leveraging Land: Igor's Strategic Approach to Assembling Parcels for Large-Scale Development

Igor details a strategic approach to land development that involves the assembly of smaller land parcels into a sizable tract that appeals to large developers. This process not only consolidates ownership but also enhances the value of the property. Land that was once segmented and less attractive becomes a substantial piece of real estate capable of supporting a substantial development project. Such as a neighborhood of 275 homes. The challenge lies in locating all the individual parcel owners. This can range from those who are unaware they possess land to those who have inherited property.

Real Estate Development Strategies: "We really look at the market and we said, okay, what can we do better or a little bit better than just a multifamily in the environment, right, of the market?"— Igor Shaltanov

The Value Added by Entitlements

Igor's business model emphasizes adding value through attaining entitlements before selling to a developer. By navigating the complex process of securing permits and making a compelling case to local government bodies, Igor's team can significantly speed up the development timeline for potential builders. Their deep knowledge of local regulations and relationships with city officials pay off in the ability to quickly transform raw land into a development-ready asset. This proactive approach can often result in a premium price once the land is sold. Reflecting the savings in time and effort for the developer taking over the project.

Land Investment: Lower Costs, Higher Returns

Land Investment: Lower Costs, Higher Returns
Photographer: Federico Respini | Source: Unsplash

Leveraging Land for Profit: Effective Strategies for Minimizing Carrying Costs and Maximizing Investment Yields

Igor emphasizes the significance of managing the carrying costs associated with land investments. Particularly property taxes, which are notably lower for undeveloped land compared to developed properties. He details the proactive measures that his partnership takes to mitigate these expenses. One of the strategies mentioned involves utilizing agricultural exemptions or generating income from the land. Such as selling hay, which can neutralize or greatly reduce these financial obligations. Effectively controlling these costs is crucial as it preserves investor capital and maximizes the investment's yield. Playing a vital role in the overall success of land development ventures.

Leveraging Land: Navigating the Challenges and Risks of Ground-Up Development

In discussing ground-up developments, Igor recounts personal experiences that highlight the complex challenges that can arise with such endeavours. These projects carry inherent risks. Including the likelihood of encountering capital calls due to unforeseen circumstances that impact the budget and schedule. He stresses the importance of anticipating possible setbacks and advocates for meticulous planning and establishing sufficient contingency reserves. These precautions are essential for navigating unexpected issues. Such as construction delays caused by weather, supply chain disruptions, or regulatory changes that may necessitate additional capital to maintain project viability.

Real Estate Investment Strategies: "And value add would be buying a property that has some value that you can provide to it. Whether it's painting the exterior or putting in amenities or renovating the interiors."— Darin

Repurposing Existing Structures

The conversation shifts to the intricacies of converting existing properties to new uses, exemplified by a hotel-to-studio apartment project. Igor speaks of the unforeseen demands made by the city to upgrade outdated building elements like electrical and plumbing systems. Often, these renovation projects can double in cost due to stringent modern standards and code requirements. Reducing the anticipated returns and demonstrating the high level of risk involved when altering the purpose of a property.

Leveraging Land for Investment Diversification: Igor Shaltanov's Fund of Funds Strategy and Overcoming Investor Skepticism

Leveraging Land for Investment Diversification: Igor Shaltanov's Fund of Funds Strategy and Overcoming Investor Skepticism
Photographer: Bill Eccles | Source: Unsplash

Creating a Fund of Funds

Igor Shaltanov discusses the concept behind the establishment of a fund of funds. A strategic move meant to streamline investment processes for those interested in deploying capital in the real estate sector. By curating a single investment entity that channels capital into multiple deals, Igor's team can offer investors a diverse portfolio through one primary investment vehicle. This fund of funds method simplifies the investment experience. Potentially lowering barriers to entry for individuals seeking exposure to specific, identifiable real estate projects. With this focused approach, Igor has been able to differentiate his offerings and cater to investors' preferences for transparency and specificity in their real estate investments.

Addressing Investor Skepticism

The interview between Darin and Igor Shaltanov brings to light the common apprehension among investors regarding current multifamily real estate ventures. A sentiment likely intensified by recent economic changes affecting distribution yields. They delve into the importance of constructing investment opportunities that not only resonate with the cautious outlook of today's investors but also align with a realistic assessment of future market conditions. Igor notes that the process of winning investor trust now necessitates a higher degree of due diligence and projection accuracy to assure stakeholders of the resilience and potential profitability of their investments despite market volatility.

Leveraging Land for Secure Investments Amid Current Market Challenges

Leveraging Land for Secure Investments Amid Current Market Challenges
Photographer: Aldrin Rachman Pradana | Source: Unsplash

Current Market Challenges

Igor evaluates the current real estate landscape, noting an increased focus on loan conditions and market feasibility. Investors today are more discerning and tend to favor deals with solid, fixed-rate loans and clear exit strategies. In a turbulent market, predictability in returns has become a preferred attribute. Pushing many investors towards opportunities that offer less exposure to variable interest rates and uncertain outcomes.

Leveraging Land for Investment Attraction: Securing Deals with Unique Selling Propositions

The shift in investor sentiment requires real estate deals to be not only financially sound but also embedded with compelling narratives. Igor emphasizes that a successful deal in today's market must have strong unique selling propositions. Such as secured low-interest rates, a defined and manageable timeline, or a distinctive location advantage. Deals that stand out with a clear story and beneficial terms are more likely to attract skeptical investors seeking security amid market volatility.

Leveraging Land Investment Strategies and Benefits of City Collaboration for Real Estate Development

Leveraging Land Investment Strategies and Benefits of City Collaboration for Real Estate Development
Photographer: Stanislav Rozhkov | Source: Unsplash

Benefits of City Collaboration

Igor highlights the strategic advantages of collaborating with city officials for real estate development projects. By directly engaging with the municipality, developers can significantly accelerate the permitting process, which is often a time-consuming hurdle. This cooperation is mutually beneficial. The developer gains the ability to push projects forward more rapidly, and the city has the opportunity to increase its tax base and enhance public infrastructure. These efficiencies, brought about by strong relationships with local government, can lead to quicker returns on investment and potentially provide significant community benefits.

Leveraging Land for Quicker Returns: The Strategic Shift in Real Estate Investment

In discussing real estate investment strategies, Igor outlines a noticeable shift toward land investment, which contrasts with the longer investment horizon typically associated with multifamily properties. This approach focuses on the potential for quicker returns. Involving a process that demands a deep understanding of local regulations, zoning, and entitlements. When managed skillfully, land investment can yield high returns, since it often encompasses assembling smaller parcels into a larger, more desirable lot for development. He notes this requires navigating the nuances of land development but asserts that the rewards can be substantial if executed correctly.

Where To Find Igor Shaltanov

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Darin Batchelder


Wealth creation through real estate provided me with a new passion to get the word out and let others know that they have an alternative to investing in the stock market.

If I can inspire and educate just one person to take action that results in life changing wealth creation then the work to launch and grow this podcast is well worth the effort.

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