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March 29, 2022

How To Move The Needle In Building Wealth With Satya Masina [EP094]

Do you want to know how to become a successful multifamily investor? Satya Masina is an experienced multifamily investor who has learned the ropes the hard way. He knows what it takes to succeed in this business, and he wants to share his knowledge with you. He started as an accidental landlord and has grown to owning over 1,000 multifamily units. His philosophy is to move the needle every single day.

By investing in apartment communities, you can create wealth for yourself and your family. Satya has done it, and now he’s ready to share his journey with you. Listen and learn!

Table of Contents:

An Attempt to Partner With Satya Masina to Move the Needle

An Attempt to Partner With Satya Masina to Move the Needle
Photographer: Cytonn Photography | Source: Unsplash

Darin: Satya Masina lives in the DFW area. He got started as an accidental landlord with a New Jersey townhome. Since then, he's learned the business and has grown to over 1,000 units. He believes in doing what you say. He believes in picking the right partners. And he also believes that this opportunity is open to all of us.

So a little bit on how we know each other, we're both part of the same multifamily mentorship group in the Dallas area, the Brad Sumrok Group. But a funny story to share, and I want to get his take on one of these deals as we get into the conversation. But my first syndication deal was a deal in Crowley, about 20 minutes south of Fort Worth. When I went on the property tour, Satya was leaving the property. So I'm like, "Oh man, he's competitive, and so this is going to be a tough one to win." We ended up winning that one.

But then, I don't know how long afterwards, I was visiting another property. It was in Howe, which is between McKinney and Sherman in North Dallas. And it was the same exact thing. Satya was leaving the property, just had a property tour, I was coming on. I loved the property, I loved the opportunity. And as I was driving home, I actually thought to myself, "I should call Satya and we should partner on this deal." I let my ego get in the way and figured I would just go at it myself, and he beat me to the punch on that one. So I'm interested to hear how that deal went.

Discover How To Save Taxes and Build Wealth

We Win Some, We Lose Some

Darin: With that, how many properties and how many units are you currently up to?

Satya: Sure, Darin. Just quick comment, we win some, we lose some. It's interesting that we came across each other on two properties and then you won on one and then we won on the other, so it's quite interesting.

Darin: It's funny. Yes. Very funny.

Satya: So our total transacted about little over 1,000 units then. And after dispositions and so on, we now have about seven properties, close to 700-plus units, and we are acquiring more.

Darin: That's fantastic. If you could start with sharing what was your background before you got into real estate investing, and then how'd you get started into real estate investing?

Satya: I was an IT guy specifically working in the financial services industry. Primarily my role as a professional services consultant was to travel out to big banks and implement our products and so on. I think I've been in IT since '99 and specifically in the financial services/technology since 2004. I was really getting restless wanting to get out of the corporate world, trying to figure out what to do. I've explored several franchise businesses. I'm glad nothing worked out because I don't think I would've survived any retail restaurant franchise businesses.

Darin: Yes, a lot of them had serious struggles through COVID.

Satya: Later on I realized, "No problem, I’m not suitable for that kind of business." I was seriously considering a coffee franchise and I was looking into the commercial strips for leasing to start a coffee business. And then that didn't work out, but the commercial real estate stick with me. At that time, I did a little bit of research into it and then figured out if I'm ever going to get into commercial, I mean, not that I had that kind of money. So I started off with an eight-unit apartment complex. That's how I got started in multifamily.

An Accidental Landlord Who Move the Needle

Satya: But I also consider myself as an accidental landlord. I mean, a side story to that is that I was in New Jersey, I had a townhome there. I was moving back to Texas. That was late 2008, 2009 timeframe and if you recall the housing crisis and so on. So I listed my townhome for sale. It didn't sell after even two, three months so I quickly turned it into a rental. It rented right away. And then since then been, I’ve steadily getting the rent check every month, that also triggered me like, I mean, "Wow, this is pretty good."

Darin: This works.

5 Step Process Ad

Satya: Yes, like that. So I was in Texas, that was in New Jersey, I still got my check every month. I liked that concept. That also led me into selecting multifamily like, "Okay, what if I own not one townhome, but multiple?" And then my first property is eight-unit in North Richland Hills here in DFW Metropolitan.

Darin: That's fantastic. For listeners' perspective, look, you can get started when you move into your second home and you just don't sell your first one. My wife and I, we had a townhome in the Fort Lauderdale area. We sold it and took that cash and then reinvested into a larger home. But looking back, I wish that I had kept that townhouse and just kept clipping that coupon. And like you said, sometimes it's not just about the money you make on that one deal, but it starts to get your mind going to, "Hey, I kind of like this. How do I look at other rental properties for income?" So that's huge. But it all started with you saying that you were restless.

You Have to Explore to Move the Needle

Satya: Yes. I was. It was in me all along. I always wanted to do something on my own, so I'm glad I took that step. So I started off with eight units, and then back in '19 I was actually able to quit my day job. Now I'm full-time into multifamily, either buying stuff on my own or through syndications going in for bigger properties.

Darin: That's fantastic. I want to explore that restlessness a little bit because I was like that. And I knew that I wanted to try some different things, but fear gets in the way. I know that a lot of listeners, there's some listeners that want to get into real estate investing, they don't know how, and they let fear stop them. You may have been successful doing the franchise thing. So my whole thing is like, look, if you have that itch in your gut, if you have that restlessness, you have to explore it.

Satya: Absolutely.

Darin: The big man upstairs put that in you, and you have to explore it or else it's going to eat you up inside.

Satya: Very rightly said, Darin. Yes, I couldn't put it in a better way. You're right.

Things are not going to be clear. It's not a straightforward path. But you're right, if you don't explore based on that restlessness, you're not going to go anywhere.

Have the Courage to Try Something New

Satya: I mean, for example, even multifamily, once I decided to do it, I was not part of any mentoring groups at that time or not part of any network, actually it took me almost a year because I would go visit a property. I knew that the value-add multifamily is the way to go, but I would chicken out every time I go. "Am I going to buy this with the 100 or 150K, my savings that I have? Am I going to put into this? This is going to fall apart." And then finally I mustered the courage to get in and get going with the value-add multifamily properties.

Darin: Well, that's huge, and I think that's very common. You said you chickened out, and then at some point you got the courage. And so I think that you have to have the courage to try something new. You might fail, but it might make you pivot also. So your restlessness first started with you going, "Hey, let me check out these franchise opportunities."

Satya: That's right.

Darin: You actually devoted some time to go out and look at these opportunities, and then it didn't work out, but it pushed you in the direction of commercial real estate and multifamily. Had you not started looking at those franchises, you'd probably be in the same spot.

Satya: Exactly. Yes.

Darin: So listeners, it's hard, it's scary. You need to have courage. If you have that pit in your stomach, you need to get out and do something about it.

Satya: Absolutely.

How Satya Moved the Needle From 8 to 1000 Units

How Satya Moved the Needle From 8 to 1000 Units
Photographer: Heron Rossato @h_rossato | Source: Unsplash

Darin: You didn't know where you were going to go, but now you started the conversation by saying you had up to 1,000 units. You started with eight. So how did you go from eight units to 1,000?

Satya: Yes. I mean, it's been a fantastic journey, Darin. After that eight units, the next year another friend partnered with me and we went and bought 37 units. At that time I didn't know any better. I mean, like I said, it was not until much later, even though I was reading a lot of stuff because it's out there on the web. But I was not part of the networking and I was always afraid of asking other people's money. So it was primarily my money. And then another friend joined me, so we went and bought 37 units. Actually, I almost did 10 transactions so far on smaller properties. Primarily it's me and one or two partners. And out of those 10, seven have gone full cycle.

So along the way we've learned a lot about taxes. We have done a lot of 1031s. Before I got into bigger syndications, I think pretty much I've done several deals, in one aspect I feel that, I should have grown much faster. Maybe I should have been at two, 3,000 units by this time.

But I guess dealing with smaller properties and doing my own property management, and out of those seven, initially I've done some recourse loans and then also slowly transitioned into Fannie loans even on these smaller properties. But that gave me a lot of confidence and a lot of attention to detail. I had actually not one or two, but several proof of concepts before I went bigger. And then the Howe property you mentioned in the beginning, that's my first syndication on a 100-unit deal.

The Howe Property

Darin: Fantastic. Well, I want you to talk about that property. Do you still own it?

Satya: Yes, I still own it. Yes.

Darin: Okay. Market-rate properties don't have any qualifications to have low-income tenants and whatnot. But the Howe property was unique. I can't remember the exact percentage, if it was 10% or 20%.

Satya: Actually, it's 40% of the units.

Darin: 40%?

Satya: Yes.

Darin: So 40% of the units were subject to a low-income program, but what was unique was that within a year, year and a half time, there was the ability to get out of it. So did you get out of that?

Satya: Yes. Just going back to what you said, Darin, till that point, we don't have any Section 8 or HUD property experience. And pushing the boundaries, what we saw in that property is a 100-unit property. We knew the whole North of Dallas up to Sherman is growing. It's right next to 75.

So we like the property, but there were a lot of questions. We don't have the HUD experience. 40% of the units are contracted to HUD, but the HUD contract is ending in a couple of years, so we thought that was a huge opportunity. In fact, we did exactly what we anticipated, so we did come out of the HUD contract right now. We actually just came out end of January. And then the 60 units have already gone up from a rent perspective from where we were an average of about $250 bump on rents on the 60 units.

Where Are Tenants Coming From

Satya: And then as soon as we came out of the HUD contract, the rents have also gone up by almost $200 on those 40 units. So it's almost like a 250 to 260K income bump from where we started in these two years. If you recall, I mean, I think we closed on it in November 2019, and we just crossed two years. We have executed what we wanted to. Honestly, I mean, again, I don't want to project anything, but we're looking at a home run, more than 150%.

Darin: Yes. I was just telling my wife before we recorded this, I'm like, "I still kick myself on that deal because I really, really wanted that deal." Because one of the things that I loved about that deal, you said it was right off 75, and it's in this town called Howe, and there's not many other properties in that area.

But one thing that I found really interest thing when I was researching that deal was I went north to Sherman, maybe 10, 15 minutes north. There was this road, and I can't remember the name of the road, but on that road, it was like apartment row. I mean, it was one apartment complex after another. And I went and visited a lot of those, and I was like, "Where are you getting your tenants?"

I was assuming that most of the tenants were coming from being employed in Sherman. Because Sherman is a larger city in that area where Howe is very small. And that's not what they said. They told me that they had a lot of people that were moving out of McKinney, which is south of Howe.

Periphery Properties

Darin: Then driving by Howe and going up to Sherman and then doing the reverse commute. I was like, holy cow, just think about all those people if you renovate the Howe property, they could save 10, 15 minutes both ways commuting back down to McKinney.

Satya: That's right. I recall we exchanged brief conversation I think at one of the conferences. You mentioned this, Darin. I think we had slightly a bit of experience with what they call as the periphery properties. So basically the periphery of the DFW.

Darin: Can you say that again? The what?

Satya: I mean so the outer rim of the DFW, so what I call as the periphery of the south DFW. For example, we owned a smaller 24-unit deal in Farmersville, Texas, which is also on 380 but closer to McKinney. We had a similar experience there. I mean, some people would like to live out in a smaller town and commute into the city for various reasons, so we felt like this is a similar situation. We saw the rent growth, it was in the growth path and so on.

Darin: That's awesome. So this was your first syndication deal. What was your experience syndicating for the first time compared to just using your own money or partnering with one or two other people?

Move the Needle in the First Syndication Deal

Satya: So I guess while we had the experience, like executing a business plan, have done several full life cycles, definitely the raising money part was new to us. Definitely in spite of the experience, there was a lot more pressure because now I'm holding other people's money. I knew what my responsibility was. We went in, communicated what my journey is.

People saw what our experience was with smaller properties. It was a small raise, but we were able to raise a couple of million in less than a week. It actually went by. I mean, that was the part I was most worried and not sure if I could raise that kind of money. But me and my partner was actually lucky to raise that in a week and then we could focus on the transaction. Which actually turned out to be very easy compared to what I was anticipating.

Darin: Yes. I think that happens with a lot of things in life. I mean, it's in your mind, you set something up as being such a big hurdle to cross. Sometimes it is hard, but sometimes you make it much bigger than it is, and that prevents you from going forward. You said you were worried. You also said that you had more pressure because it was other people's money. I think that raising capital is one area of syndication that people get caught up on and are scared about.

Move the Needle Through Syndication

Satya: Yes.

Darin: But the flip side of it is if you think about the people that you brought into that deal, in the beginning you told me that deal, you don't want to say it for sure, but it looks like it's going to be a home run, those people are all going to make great money.

Satya: Yes. What I put off for a long time, I mean, "Oh man, I don't want too many people on a deal. That's a lot of pressure." But as you said, you can have all these apprehensions, but I knew that to grow to the next level, syndication is the way to go. But what I've also realized is that along the way now we love to educate our passive investors. My second syndication already went full cycle.

So we just gave them back the remittance. And it's such a rewarding experience thinking that we made some difference to the investors. They appreciate our efforts and so on. Now those conversations to educate them on wealth building and so on, overall what I felt was, I mean, maybe that's not my thing. Now I enjoy it so much.

Darin: That's awesome.

Satya: Which is strange with how things turn out.

Darin: Exactly. You never would've known that. But I also think it's a way of serving.

Satya: Yes. Exactly, yes.

Darin: There's some people that will go out and do things in their community to help serve, but here syndication is not just about, "Oh no, can I raise the money?" You're actually helping grow the wealth of all of those investors.

Satya: Absolutely.

A Means of Serving

Darin: And that, I think, is a means of serving. And that's aside from the fact of all the knowledge that you pour into these people. There's the financial piece of it where they're providing some funds and then you're giving them great returns. And then some of those people really want to learn the business. So you're teaching them along the way. Some are just looking for the returns.

Satya: Yes. So podcasts like these, they have an important role. I was on a podcast before where based on your story, people reach out to you. And then now I also learned that when people reach out to me, I love talking to them, educating them. "Hey," people ask me, "how did you get started? What can I do to get started?" And also similarly for my investors, apart from the wealth-building process, for example, recently there were inquiries about, "What if something happens to me? Can this investment go to my kid or my wife?" And then we were exploring like the wills and trusts.

So I explored my own will and trust, and then we provided that contact to how did we do it. I exchanged information in regards to, "Okay, this is what I did. This is how you protect yourself. This is how you protect your family. So go talk to this attorney, or find whoever it is." I mean, we are not experts in the subject matter, but these conversations are triggering so many things where we make an impact on our investors and so on.

Darin: Yes, that's huge. And that goes along with the network. At some point you joined Sumrok Group, and all of a sudden you meet a lot of other syndicators.

Network With the Right People to Move the Needle and Accelerate Your Growth

Photographer: Dylan Gillis | Source: Unsplash

Darin: So it's not just about meeting passives that will invest in your deals, but you meet other syndicators and then you learn, "How did you do it? How did you protect yourself in this scenario? What companies do you use?" And then all your passives get the benefit of the fact that you are educating yourself in that way.

Satya: Absolutely. The mentoring groups, like the networking, meeting with the right people, I cannot put value in all of those. Because there is accelerated growth of learning. And when you take action from what you're learning, you grow your company, you grow your wealth along with your investors and so on.

I mean, I did come in a little late. I started doing multifamily before on my own, but the amount of growth I got, like "Oh, wow. Okay, this can be done." I didn't know about this, like syndication concept. It's not like, I mean, specific mentor. I mean, definitely those groups, the mentoring groups, but it's the people you surround yourself with which accelerates your growth like anything.

Darin: Exactly. People have asked me what's the biggest value I received, and one is it helps you get your first deal. But, to me, it's more about the network. Knowing, okay, what property management companies do people use, what rehab people do people use, what attorneys do people use. What finance companies, all those things. That if you had to do that on your own, it may take you a lot longer and you may pick the wrong guy.

Satya: Absolutely, yes.

A Big Ripple Effect

Darin: So I think that's huge. Congratulations, by the way, because you killed it. It's so funny how you're not the first person that has purchased 1,000 units and feels like, "Oh man, maybe I didn't go fast enough." I had one guy that was like, "I've been in business for like 10 years and I've done like one deal a year." He felt like he hadn't done enough. And I'm like, "There are so many people out there that have not even bought a duplex. Not even bought a single family home as an investment." And so I believe there's a big ripple effect. Look, first podcast, you did, you were probably nervous. But you do it because you know the benefit of teaching somebody else.

Satya: Absolutely, Darin. That's funny. So for example, even you, right, I'm pretty sure I followed you on Facebook. I know you got started in multifamily, but we are in the same line of business. But I see that you started this podcast now I think maybe a year ago.

Darin: Year and a half ago.

Satya: Sometimes maybe I might not have listened to every single one I do listen to, "Oh, wow, this looks interesting." And then you, no matter what your experience is, your podcast and maybe other podcasts, I go walk away with, "Oh, wow, I didn't think of it that way." You take away the golden nuggets like, "Wow, this is new information that I've never heard." You're not only impacting the newcomers but even experienced folks.

Move the Needle Every Single Day

Darin: Well, first of all, thank you. And I learn from every single guest that comes on, which is fantastic, is that I get to learn from everybody. I hope that listeners learn as well, so I'm glad to hear you say that. The biggest, hardest part for new people is to actually have the courage to take action, so I try to hit up on that. But then I want to also provide value to syndicators that are looking to scale to learn from other people that have done more. So that's fantastic. Talk about some of the learning lessons that you've learned along the way.

Satya: While I don't have, I mean, regrets scaling up or things like that.

But the way I see it is that you have to move the needle every single day. It's not going to happen in a day. It's not going to happen in a month. But build your knowledge, but knowledge without action, it doesn't get you anywhere.

As far as the learning lessons, finding right partners. I realized that my initial personal deals where I had a friend, great guy, great friendship even now, they didn't have the same abilities or maybe different kind of mindset for us to move and grow bigger much sooner.

Darin: Go to the next level.

You Need to Find the Right Partner to Move the Needle

Satya: So I had to have an honest talk and say, "Hey, we are friends, I mean you are a great guy. But unless we push ourselves and unless there's a mind shift change, we are not going to get anywhere." So that's when I met my current partner. I think having those complimentary skills, bouncing off ideas with each other, agreeing to disagree and debate. Discuss but arrive at a decision and move along. So I would say I wish I found the right partner much sooner, which I have right now and I'm very happy with that. I would say that's something that I've learned along the way.

Darin: I've heard people talk about partnerships as being very important. You didn't use this terminology. But I think of it that way. I've seen it in this line of business, that people that are willing and able and actually do have the hard conversations early.

Satya: Yes.

Darin: It's not easy to have that conversation with somebody. But there are some people that I've met in this business, and man, when you start talking about partnership, it's like, "What's your net worth? What's your liquidity? What are you going to bring to the table? What's your role, and what's my role?" They just are not wasting time with people that aren't going to be complimentary to them and a good fit.

Cheapest Is Not the Best

Cheapest Is Not the Best
Photographer: kerry rawlinson | Source: Unsplash

Satya: Yes. What I also learned is not to have shortsightedness, the same thing with partners or even other vendor partners. What I've also realized is cheapest is not the best. At least I don't jump to different people or different vendors. Yes, if it makes sense for the deal, yes, I would do it. But sometimes you don't pick on small things. And then that lasting relationship is what makes you and help you along the way. I found solid vendors, I stuck to them, and I get a lot of benefits, unseen benefit from that.

Darin: Like what?

Satya: For example, my lenders, they promote me. I get a lot of value, input, not just a term sheet from back. Because if they have history with the property, they're rooting for me to win.

Darin: They might be using their leverage and their relationship with the broker to push it your way.

Satya: Yes. They're actually connecting me with investors because they think I'm honest guy and I'm doing good. And so maybe if someone comes to them, they give my name, like, "Hey, talk to this guy."

Darin: That's a good thing to have, somebody pushing leads your way in different aspects. You mentioned something before that I want to get your take on, you said, "Cheapest is not the best."

Satya: Yes.

Darin: So talk about that. What do you mean by that?

Satya: Professionals who take their work seriously, I mean obviously they're proud of what they do, and they might cost more. They've gone down the path, it could be with contractors, it could be insurance, lenders, anything, right?

When someone values their work and then when they take themselves very seriously, it might cost you a little bit more. But when you go with the cheapest option, we have learned it in a very hard way that it comes with a cost.

Darin: Yes.

Unseen Costs

Satya: Some unseen cost. And so what I personally realized is that because initially my thinking was that I need to get the cheapest stuff and get it done. I mean, my intention was to get it in a very efficient, I mean price-effective manner, but later on, I kept realizing that, "Okay, I paid much cheaper, but at the end of the day, six months down the road, actually it cost me a lot more." I would've used a better contractor to begin with and I wouldn't end up in a situation again in three months. So those are the lessons that we learned. Value the professionalism, and then value the quality of work rather than getting done at a cheap price.

Darin: No, I think that's huge. I mean, even just on the podcasting side, I hired a consultant to help me with launching the podcast because I had never done it before. I'm sure that I could have found somebody cheaper, but he provided so much value in, "Hey, you should really look at this software for this piece. You should look at this software for this piece." Look, if I was having to do that on my own, every one of those decision points I would've had to research it and figure out and I don't know if I would've picked the right one. So that's a huge value. So maybe I'm paying more for one piece of it, but I'm getting all this other value based on the experience level of that professional.

Satya: Absolutely.

Darin: Same thing holds true in multifamily. Hey, talk about what markets are you focused on?

The Markets Satya Is Focused On

Satya: I'm primarily in DFW, we are not executed anywhere else. I'm open to looking at other markets like in other Texas markets and maybe Florida, Arizona, and things like that. But so far with the bandwidth I have, I'm still bullish on DFW. The one thing is that because now you have the burden of the history, you bought a 60-door now you're buying it a 100-plus, 150-plus door, oftentimes like, "No, I'm going to stop buying in DFW." And then you start researching other cities, then you come back and wow, those are still expensive so you come back to your core city where you are familiar. So I'm still very bullish in DFW, but I'm open to look elsewhere.

Darin: Why are you bullish on DFW?

Satya: What I like with DFW, Darin, is that this is a very much a mixed economy, not specific to one specific industry. So I like a lot about that. And then we still have a ton of people moving from other states. So DFW is still capturing a lot of migrants, the incoming folks within Texas. And then even from a price per pound situation, I still feel the valuations are very much reasonable compared to say, for example, Tampa, Florida, Phoenix, Arizona, some North Carolina markets and so on. I still feel that this still has a lot of potential, DFW.

Darin: Yes. So I have a lot of the same feelings as you. I remember when I met other syndicators that were like, "Darin, man, I was buying a 30, 40 a door, and I'm out. And this was four years ago. And I'm buying at 80 a door and I'm like, "I'm in." And now we're in that situation, right? We bought at 80-door, and now it's a 150-door and like, "Do you keep going?"

Diversify in Other Geographical Locations

Darin: I don't know the answer, we don't have a crystal ball. But there are certain things that I still believe are bullish on DFW and Texas. I saw in COVID, it was illegal to evict your tenant for nonpayment. But then there were some tenants that would, all of a sudden, just leave in the middle of the night. When that happened, there was a line at the door for new people to come in.

Satya: That's right.

Darin: I don't know if that's the case in certain other markets. So I was very appreciative as an owner that, hey, if somebody left, there was a paying customer coming in. And that goes to population growth and income growth and job growth. And those other markets you mentioned that you have interest in too, Arizona and Florida, those are other high growth markets as well. But to your point, all the growth markets have a high price per unit. So why not focus where you know the markets yourself?

Satya: That's right. Yes. So you have the benefit of local knowledge here, so why not focus when you still have the potential. But at the same time, I always advise my passive investors to diversify, even geographical diversification. We're not the only guys doing it. So I come out sincerely and say, if you want to invest somewhere, like in another geographical location, we even connect them with other syndicators. Because I also personally invest passively in other geographical locations to diversify. I say that to my investors as well.

Darin: Oh, I think that's great advice. I say first pick your market that you want to be in, then find good strong syndicators in that market,

Satya: That's right.

Pick Your Markets Carefully

Darin: Then look at the deals from those syndicators. I haven't really kept up with you in terms of your latest deals. I've seen a lot of syndicators moving in the last year or two from B, C to A properties, maybe B+ properties. Have you seen that? What's your perspective on that shift? Are you going that direction or are you staying in the B, C value end?

Satya: Sure, Darin. We have definitely done a lot of C deals. My last two big syndications, one is a 223 unit in Grapevine and another one 224 unit in Irving. Both I would say that there are B, B+ situation. Personally, I am moving away from C, but I would still like to do B, B+ kind of deals.

We did go after a few A deals. For example, there was one in Van Alstyne, which is close to Howe. We did go after a deal over there, we didn't win. Certainly A deals are on our radar, but we would pick our markets carefully. I'm also exploring brand new construction as well.

Again, just like as you said in the beginning, pushing boundaries little bit by bit. I have a personal property in Waxahachie. It came with 65-unit townhomes with plenty of seven-acre land. We love that market and we are now exploring to build over there. I think in a very similar fashion, like where I've done personal deals and then offered the same thing to investors. So this construction project could potentially be smaller partnership kind of deal. But there's a possibility we can spin that off as a syndication also. We're still exploring. But definitely we are interested in A deals based on current pricing.

Move the Needle Even If You’re Scared

Move the Needle Even if You’re Scared
Photographer: Dillon Kydd | Source: Unsplash

Satya: But I would do a B, B+ value-add all day long if we can find it at the right price.

Darin: It's funny this conversation, in the beginning, you start saying that you started with eight units. Now you've just mentioned the last two deals, 223 and 224 units. It doesn't sound scary when you say it, you just say it a matter of fact. But in the beginning, that eight units, it feels more scary. I want listeners to know that, is that, look, most people that I've interviewed, that first deal or two was the scariest, and it was much smaller than where they ended up growing into.

Satya: Absolutely. Actually, I mean, I still recall how fearful I was, not just that eight, but the next one, getting into a recourse loan. The banker was asking, "Oh, you don't have experience. Can you write up your business plan?" I mean, I don't know how to write a business plan at that point but specifically for multifamily. And it was a recourse loan, so I still vividly recall all the details and my nervousness with that small 37-unit deal. But the last two deals, the transaction is done, it's not like as any fearful. The last one was 35-plus million. We are able to execute it within 75 days. So it's strange.

Darin: Because you mentioned it earlier, you build confidence with doing transactions as you get the experience. What I love is that you're not just settling. You're like, "Okay, now, new construction, I've never done that before." That's a new learning. There's going to be some stuff that you don't know how it's going to work and you're going to have to work through that, but I also think that's part of life.

A People Business

Darin: That’s the excitement. If you do the same thing over and over and over again, then you start getting a little bored.

Satya: Absolutely. You're right on that.

Darin: That's fantastic. You talked a lot about relationships. I think that sometimes that gets talked about and people don't really understand the value of that. That, "All right, I got to go to these conferences and go to these networking sessions. What are people doing? They are just going shaking hands." But these are people that you actually do business with and that you trust to help you execute your business plan.

Satya: That's right.

Darin: That's an important part of it. And just even networking with other syndicators, you may hear something that somebody's going through in 2020, and then it has no value to you. Then all of a sudden, in 2022, you have one of your properties going that same deal. And you're like, "You know what? I know who to call."

Satya: Yes, exactly.

This is definitely a people business, Darin. I strongly believe you cannot go anywhere without do what you say, stick to your word, be transparent, and build relationships. That's what it is all about.

There's a lot of knowledge involved, but it's not rocket science. It's not something that people cannot acquire. So it's knowledge, action, and then build. I mean, with your actions, definitely build your trust, integrity, and all that. I mean, I'm glad you brought up that. We cannot emphasize how valuable these relationships are and also how valuable these networking events are.

Do What You Say

Satya: Because you meet one guy, just like you said. We shook hands, we talked for 15 minutes, but then it comes back and wow, you know what? I remember that conversation, something comes up, and then you can source information just by calling someone. So it's definitely helping out each other.

This is commercial real estate, multifamily is huge. I mean, it's not like one person can go buy all these assets. So you would rather grow much faster when you help each other out than working in isolation and not sharing information and things like that.

Darin: That's huge. You said, "Do what you say." I've heard a lot of people say that. Do what you say you're going to do, where does that come up? What do you mean by that?

Satya: For example, talking specifics especially when you're sourcing deals with brokers. I mean, the bigger properties have big players, a lot of competition, which we will participate in the market process and win the deals like as we are supposed to win. But I've also done several off-market properties. How did I get those deals? Definitely there are much more bigger players in this DFW market. It's the trust you build with the broker, "Did I deliver on what I've said?"

I think people's time is valuable. If I said I will call you, I have to call. I said I will tour this deal like now I did. Once you win the deal, it's important to move heaven and earth to execute on this deal. So over time, you build relationships. People care for you because I delivered on what I said. It could be simple things, not even something big, right?

Deliver Even With the Small Things

Satya: Even for your passive investor, I said I would call, and then I called and I spent 30 minutes. And then they asked for some information and I delivered it.

It's all about these small things. Just don't say something because it's nice to say, but in each of your interactions, if you have said something that you would deliver, it could be something simple as I said I would give you some information, you deliver on it.

Darin: I think I love that you brought up not just the broker situation. Because that is a real one that, look, if you get into a deal and you make the transaction easy and you do what you say, then the broker's going to remember that and he's going to be more apt to recommend you on the next one. But there's all these other different little things that may seem small, but if a passive investor asks for something and you say you'll get it to them, make sure you do it.

Because that person may be talking to his brother and his mom and dad and aunt and uncle, and they could all come in on the next deal. People talk, and so you want to be a person that does what they say they're going to do. I think it applies to all different aspects within the business.

Hey, what's the next big stretch goal for you now? Is it a unit count? Is it moving into other markets? What's your next big stretch goal?

Satya: I think definitely I have the goal for scaling and then definitely on new construction project is my next goal. It's not a rat race for me because I need to get to a certain unit count.

A Very Cautionary Approach While Moving the Needle

Satya: Because as we grow bigger as we raise money, it has to be a win-win for the sponsor and the investors. I take a very cautionary approach without getting bogged down with fear. Fear is good because it makes you think properly. But at the same time, fear cannot let you not take the next steps. I want to plan my steps very carefully.

It's not my personal ambition that I need get to 5,000 units, but it has to be a win-win. I mean, yes, I can keep on doing deals just because I can raise money right now. But in the back of my mind, what if these deals that we are doing don't deliver in the next two years or three years or whatnot. So I'm taking a very cautionary approach. I want to grow, but I want to grow where we can deliver.

Darin: You're focused on delivering.

Satya: Delivering, exactly. I'm not saying that there might not be a deal where you're going with all your best intentions, you try to put in your best efforts to execute it. But there might be situations where it's not up to the mark of what you projected. In those cases, what I would like always to do is that constant communication and transparency. That's where you'll be covered if you're ever in a situation where, for whatever reason, you're unable to deliver. So I would like to go step by step building confidence with my investors and not take a speed in trying to get a certain number.

The Risk of Doing Nothing

Darin: Yes, I think that makes sense. It's a difficult one because you've done a number of different deals. If you have investors that have been in multiple deals and you've performed for them on two other deals, they made great money and the third deal maybe the economy goes into a down spin and it's out of your control and it stalls out a little bit, that person probably understands. The difficult part is the first-time investor with you that is in only that deal and that's all they know. That makes it more difficult. But to your point, I don't think that can stop us as syndicators from moving forward.

Satya: Definitely. Because anything unless it's explored, because you don't make money just sitting around. There is always risk in whatever we do. We still need to take risk.

Darin: And in doing nothing, right? I mean, if you have $100,000 dollars in the bank and there's 7% inflation, which they just said, well, then at the end of the year, you're 100,000 is only worth 93,000 of buying power.

Satya: You're absolutely right, Darin, there's more risk not doing anything right now rather than you losing money on a solid, hard multifamily asset.

What Satya Do Outside of Work

Darin: Right. So what do you like to do outside of work for fun?

Satya: The one thing I like is I love watching documentaries on various topics. And then I would like to travel. Definitely not doing it as much as I want, but I want to explore other countries, even different places in the US, which I try to do once in a while. So travel. Definitely, I have two daughters so I'm pretty much engaged in their activities.

Darin: How old are they?

Satya: They're 14 and 12. Not that they need me. My 14-year-old right now is like, "Okay, I mean, I had enough of you."

Darin: It's funny how being a parent it's like when the kids are really young, you can't say anything wrong, right?

Satya: That's Right.

Darin: And they get to a certain age and you can't say anything right.

Satya: Yes, exactly, yes. I'm in that situation right now. But you just suck it up and then be there for them and guide them through the process like school or building character and all that stuff.

Darin: Absolutely. Well, Satya, I really appreciate you coming on the show. I appreciate you sharing with others. Hey, if others want to reach out to you, what's the best way for them to get a hold of you or learn more about you?

Satya: Sure. Either my email or I can give my phone number.

Darin: So you want to give your email address so that they have that?

Satya: Sure, satya.p.masina@gmail.com

Darin: Fantastic. Well, always a pleasure. Look forward to seeing you at the next event. I really appreciate you sharing with the listeners. And listeners, I hope that you enjoyed that one. Until next week, signing off.

How to Reach Satya Masina

  • Email Address – satya.p.masina@gmail.com

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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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