Today we have Meetu Bhatnagar on the show! Are you one of the women giving back and looking to make an impact and create long-lasting change? Meetu is a general partner in over 1,200 doors with a $100 million+ portfolio. Through her experience she has insight into land purchases, development projects, owning businesses, brokering real estate, and more. She also has a servant's heart.
In this episode you will learn:
- Core Values – how to stay true to your core values when picking partners
- Land and Development – when to buy and buying at the right price
- Serving – how she views investments as a way to serve investors and serve the community
- Assisted Living – why she believes assisted living is a great opportunity as boomers age
Table of Contents:
- Where To Listen To The Podcast
- Women Giving Back Through Multifamily Investment
- How the Land Deals Work
- Women Giving Back on Guaranteed Max Price Contract
- How Women Giving Back Approach Large Deals
- Risk of Loss Versus the Upside of Winning
- Learning Lessons for Women Giving Back
- Women Giving Back Towards Assisted Living Facility
- How To Reach Meetu Bhatnagar
Women Giving Back Through Multifamily Investment
Darin: Meetu Bhatnagar lives in the DFW area. She initially was not impressed with the cash-on-cash returns of multifamily, but after investing, she saw the incredible tax savings impact of multifamily investments, and now she is fully impressed. I love her quote, "I'm not in it for the money." This girl is a giver.
So just a little bit on how we know each other. We're both part of the same multifamily mentorship group, the Brad Sumrok group. I've been seeing Meetu being posted on all these different deals so I'm interested to hear what she has going on. She's actually a PhD doctor, so she's a smart cookie. I'm interested to hear what she has to say and hopefully, she can share some of her wisdom with the rest of the listeners. So Meetu, with that, can you please share how many properties and how many units you're invested in?
Meetu: Currently, I have invested in close to 1200 doors. I have been GP in a hundred-plus million portfolio, and currently, I'm doing our development projects. It's a 306 luxury-class A gated community.
Darin: That's it. How long have you been investing? Did you start out in single family and then growing to multifamily? When did you make that switch if you did?
Meetu: So I started investing back in 2010, and that time, we were investing back in India. Later on, I decided to invest here in the US. Earlier, we were purchasing businesses along with real estate, but then it was keeping me very busy and taking my precious time away from the family. So I decided to invest in multifamily and have better control on the time.
How the Women Giving Back Use the Value Add Strategy
Darin: So when did you start getting focused on multifamily?
Meetu: I started focusing in multifamily in 2017 as a passive investor, but went full-time into multifamily in 2019.
Darin: Fantastic. So you are very humble. I mean, 1200 doors and a hundred million dollar portfolio is not something that everybody amasses ever in their lifetime for a lot of people, and you did it in a short timeframe. That's fantastic. Can you share a little bit about your journey and how that went and how it's impacted others that you've brought along with you? Other investors that you've had share in those deals as well?
Meetu: Sure. So I was always interested in real estate, and then business was my passion. I wanted to be an entrepreneur so I can be with my family, with my kids whenever I want. I did an acquisition of a preschool. It was a great acquisition. We did value add change. The staff brought in new resources, brought new vehicles, and turned around the business in six to seven months, but it was too time-consuming. Taking away the precious time. I was not able to focus on family. Plus, I was making a lot of money, but then not getting that much tax benefits. So that's when I decided to move from a childcare center to multifamily.
Darin: So that's interesting that you say. I really haven't heard too many people talk about that, using a value add strategy but in businesses, people do that all the time, right? The private equity groups will buy private companies and then think that they can run it better and more efficiently and increase profitability.
The Role of Women Giving Back in the Multifamily World
Darin: So it's like a value add play, but we hear that so much in the multifamily world that I'm just not used to hearing it as much on the business side. So you had that experience on the business side, purchasing a preschool and turning that business around, and now you take those same skills and bringing it into the multifamily world.
Darin: So what's your role when you partner with other folks on the multifamily side?
Meetu: So when I partner with other people, I do have a commercial real estate background as well. I'm a CCIM. I'm a certified commercial investment member. I am a broker as well, and I have taken a lot of courses in real estate management also. So I believe I have a lot of values where I can add some value to the table by being in operations. So I mostly do asset management and project management.
Darin: Right. So let's talk about the 306-unit development deal. I mean, going from a value add existing property to building groundup, it's a big difference.
Meetu: It is.
Darin: So talk about some of the differences in that and, again, what role you play in that deal?
Meetu: Sure. So I was very closely monitoring the real estate cycle, and during the pandemic and soon after the pandemic, I observed that the cap rates were really compressed. The people were buying around three to four cap rates. At that time, buying property doesn't make sense to me. I decided to put my portfolio on sale. Apparently, I was looking on opportunities that are in the market. And the projects that are shovel-ready because I was looking at the IRR cycle as well and the multifamily was in the expansion phase.
The Shovel Ready Projects
Meetu: So if I am doing development, I wanted to deliver the project during that expansion cycle because if we deliver the units during that time, the rents are higher and they're easily absorbed. So when I got this opportunity, we bought it at the right place and it was having a lot of development incentives. That's when I decided to go for the development deal.
Darin: So what year did you buy into that deal?
Meetu: I bought that deal in 2021 of June.
Darin: So can you share with the listeners what you mean by shovel-ready?
Meetu: So the shovel-ready like this project, it was already zoned. It was having the entitlements ready. The architectural and civil was done, and Princeton City doesn't require the construction permit prior to moving the dirt. So if we want, we can go straight ahead, do the acquisition and start moving the dirt around. That's shovel-ready.
Darin: So that saves you a lot of time. So if you're to buy raw land, first, you have to make sure that it gets zoned for the correct commercial use of that property. Then you have to get all the entitlements squared away and get the utilities squared away before and all the, as you mentioned, the engineering before you can actually get started. So that process can be quite lengthy, and it also has risks because you need the approvals.
The Type of Lands Women Giving Back Are Looking For
Meetu: Yes. It's very risky and it could be lengthy also. Sometimes we do have the ballpark, but sometimes it can take a little bit longer because it all depends upon the city, how fast they work, and how friendly they are. So that's the reason I decided to go for a shovel-ready project
Darin: Yes. That's smart.
Meetu: Because if we wait for too long and we hit the recession and then all the hyper supply, then the project will not be that profitable. That's the reason I decided to go for shovel-ready projects.
Darin: Right. So one, you take some risk off the table. Two, you compress the timeframe because the time to get that is already set up. So there are landowners and developers that they focus on buying raw land and then getting all the approvals set up and all the entitlements. And making it shovel-ready and then selling the land at that point. Then there's other developers that buy the raw land, they get the entitlements, and then they want to actually build the property and get it leased up and then they want to sell it. So each developer has a different MO in terms of what they're trying to achieve and what their business plan is. So you are very specific on, "This is the type of land that we're looking for."
Meetu: Yes, you are correct Darin. So there are the land bankers. They are typically the investors who buy the land at a very reasonable price. They hold and sit on the land and then comes the land packager.
How Land Deals Work
Meetu: They package. They get it zoned, they package the land, and then comes the developer into the picture, the land developer, and then the construction. The person who is doing the construction or the vertical construction development.
Darin: I'm not an expert in the land area at all. So I want to ask you this question. I have heard that when people buy land, it's different than buying a value add property where you're going through 10 different buyers. And there's best and final and then somebody's awarded the deal and then your 60 days to close. My understanding on land deals is that there could be a lockup period where you have a contract signed. But you have a longer period of time to make sure that all of the entitlements and everything that you need are approved before you move forward. Is that correct?
Meetu: Yes. That's correct. In land deals, typically, the feasibility study is slightly longer as compared to the multifamily. Also in multifamily, most of the time it's hard money from day one. While in land development, there is no hard money involved.
Darin: No hard money at all?
Meetu: No hard money at all.
Darin: So even to lock up the contract for a period of time?
Meetu: Yes. They lock up sometimes for as long as three months. They give you the time to do the due diligence if it's raw land, but if this is a project that is shovel-ready and all, you might not get three months, maybe 30 or 45 days for it, but usually there is no hard money in the land development deals.
Biggest Why for Women Giving Back to the Community
Darin: That's great. Okay. Well, thank you for educating me on that. So why did you want to do A class versus B and continue with B and C? I understand the new development and you can't really develop a B and C class. So why did you choose to do that?
Meetu: So there are three types of properties, class A, B, and C, right? So usually, class A are newer properties and it's not always the new property, it's the amenities that you are having in the community that makes it a class A property. We have a luxury class, resort-style swimming pool. And we have a gated community. We have a car wash and puppy wash, and we have courtyards that are as big as an acre, so walking trails and all. I am in this business not to make money. It's like my biggest why.
Darin: Your biggest why?
Meetu: Yes, give back to the community and make an impact on other people's life. I believe I have some skills that can definitely add value to other people's lives. So here, even though it's a class-A property, the rents are going to be very reasonable.
Darin: I just have to say I don't know if I've had one person say that before. Like, "I don't care about the money. I'm just looking to have an impact and to give back to the community." That's pretty special.
Meetu: Yes, because the residents living there, it's their house, right? They should be proud of where they are living. So that's my biggest goal. God has given me a beautiful life and if anyways my skills can help elevate other people life, I'm all in.
What Are the Different Building Class
Darin: That's awesome. I love that. I always think of the new development mandating to be an A property because that's the only way to make the numbers work is to have the land is expensive. In order to buy the land and build it, you have to have rents that are high enough to still have it be profitable. So because of that, every new build pretty much has to be an A-type property.
Meetu: Yes. In a way, you are right, but it's not necessarily the brand new buildings they are class A because if they don't have amenities, then they will be class B. Or if they are in a demograph like median income group is 35 or 40, they can be even categorized as a class C property.
Darin: Brand new being classified as class C, you don't see many of those.
Meetu: Yes, because if the median income group is 35K.
Darin: Most of these are tax credit deals, right?
Darin: Low income. So now, talk about some of the different risks between the value add existing to building. I think of the risk on the value add existing to be, one, can the GP group execute on the plan? The rents that they're forecasting, are they able to achieve those? Are they able to keep the expenses under what they have budgeted? Then do they have the right loan on the property so that debt service doesn't get out of hand?
Women Giving Back Gives Tips on Value-Add Acquisitions
Darin: On a new development, how does it work with all the contractors and the cost of lumber and the cost of labor and all of that? How does that play into a new build? Do you just take those costs and then add a certain profit and you just change what the rent is from the original plan and you just bump it up to a higher rent if you have higher costs along the way?
Meetu: Yes. So when you compare the value add, that's a very good question, right? Value add acquisitions are comparatively very easy to do. You can forecast the risk involved. But you need to have the right app. You can mitigate the risk at various levels, but in development, there are so many unknowns. So you have to be very careful, and sometimes people jump into this business not knowing what they are doing because here, too many things are going into the picture.
So if you overpay for the land, if you don't get the land at the right price, there is no way you can make money. You have to have the right price of the land, and then when you are working with a contractor or a general contractor. You can go and decide to be your own general contractor, but that's not the best way to go. We go with general contractor and then try to have a contract that guaranteed the maximum price or a lump sum contract so that we know how much is the cost going to be.
Women Giving Back on Guaranteed Max Price Contract
Darin: I'm sorry. Can I jump in there? So I've heard a lot of people talk about that guaranteed max price contract, and I haven't done new development. But I would assume that the GC is like, "Well, look, I could do that within certain parameters, but if lumber prices shoot up astronomically, I have to get paid for that." They can't build if their supplies are dramatically different than what they budgeted for, can they?
Meetu: So when they are doing the contracts, suppose we have all the drawings ready and we are going for the bids, we give it to various GCs. We identify three or four GCs and then they bid on the project for us. So when they do the project, then instantly within 30 days, we have to award the project. As they are awarded the project, they go back and block the lumber prices. They do the buyouts. So buyout is very important, and if you are not working with the right GC and then they don't do the buyouts, it's going to be a problem.
Darin: Right. So they lock in the rates once they're awarded the contract. I'm guessing that you must have to front some of that money. I don't know if that's the case or not.
Meetu: Yes. If the requirement is to give some advance, then we have to give the advance, but mostly in the lumber cases, they don't ask for any. They just issue a PO, purchase order, and that's how the prices are locked. But during the last couple of years, there has been so many fluctuations, right?
The Escalation Clause
Meetu: So the GCs were not very comfortable with the GMP or they were having too much contingency. So what they were coming up, they were doing the lump sum contracts and they were having an escalation clause in it.
Darin: Escalation clause. So talk about escalation clause. How does that work?
Meetu: So escalation clause is they took the bid at this price, and now the prices have still stabilized, but 18 months back or 12 months back, the prices were changing in one or two weeks also. If they are not able to lock the price and then there is some change in the price, then the owner have to pay for it. But they have to give all the required documents to prove there is a price increase.
Darin: Right. Correct. Where do you get most of the investors that invest in the syndications with you, and then two, are you finding in today's economy that investors are more cautious?
Meetu: So most of my investors are elite professionals like doctors and engineers, and most of them know me very well personally. They are friends and family. I was having a podcast as well, which I stopped doing it because I got too busy with this development project. I got a lot of followers from there as well. They hear my story and somehow got related to me. They really like me and the story and they feel like I have some values and core values that they cherish.
I'm a very transparent person. Plus, my philosophy is I don't believe in quantity. I really do believe in quality. So whatever I am doing, I'm doing with very focused and that's what the investors like about.
Why Women Giving Back Choose Multifamily
Darin: So in today's market, do you find that they're more cautious?
Meetu: Yes. There are a few investors that are very cautious, but all the investors in my database, are not because if they really like you and trust you. They know even if the market is not favorable, you are going to do great.
Darin: That's fantastic. So why multifamily versus the businesses that you were purchasing before? Why do you like the asset-class multifamily?
Meetu: That's a very good question. So multifamily, the primary reason is it gets impacted during the recession but not to the extent as the other businesses or the other property types do. That is one of the reasons. Then you are doing something good for the community. It makes you feel good. That's another reason. All the tax benefits that we get in the multifamily forced appreciation, and cost aggregation when we do cost segregation, that's one of the reasons that we prefer to do multifamily.
Darin: Talk about somebody that you had to educate to get involved in the first deal because you can't really get your hands around the tax benefits and the income potential of these deals until you actually are in one. So talk about it from an investor standpoint. Just picture in your mind somebody was like, "Meetu, I don't fully understand it, but I like you, I trust you, and I'm going to do this and see how it turns out," and then they start saying, "Oh, now I see. Now I see the tax benefits. Now I see the returns." So talk through a situation like that.
Meetu: Yes. So I'll give you my own example, right?
The Advantage of Saving Taxes
Meetu: So I started learning about multifamily in 2017, and I was having my real estate license as well. I was one of the top producers in my company and getting awards in real estate as well. I was making very good money and my childcare center was doing good too. When initially I came to know about multifamily, I was not very impressed with it.
I was like 7%, 8% cash-on-cash. It doesn't sound a lot and I don't want to wait for five years when I can flip the businesses in three years. The return I was getting in my business was 35%. So initially, one or two years, I couldn't get what's the real benefit of it, but in 2018 when our family income significantly higher and we were having a big tax bill, that's when I got the advantage of saving the taxes.
Then that's when I decided, "Oh, I missed the cost segregation part. I missed the tax saving part." That's when I went to my husband and I said, "I think we should invest more in a multifamily."
He asked me, "Why do you want to do so?" I said, "Because of the tax incentives. We can save a lot of taxes and maybe pay $0 in taxes." He said, "I want to know with whom you are talking these days. Do you want to go to jail or what?" I said, "No, I'm talking with the right people. Let's go and schedule a meeting with our CPA."
How Multifamily Investment Helps With Taxes
Meetu: So that's when we had a meeting with our CPA. We went to our CPA and I told him everything about what I learned in multifamily. He said, "Yes, that's the way. That's the right way to do." That's how I realized what mistake I was doing by not investing in multifamily and just looking at the cash flow and not looking at the tax incentives that comes with the multifamily investment.
Darin: That's a great story because I think it's so true until you actually do it and see it, really, the light bulb doesn't completely go on. We've heard this saying before, "It's not how much you make but it's how much you keep." Until it's yours, until you see the impact for you, I know my grandfather told me a long time ago, he's like, "Darin, you got to learn about taxes." I was like, "No, it's so boring. I don't want to do that." Then when I got involved in the multifamily world, I have another business.
And I was able to take all the depreciation from this business and pretty much cover the profits from the other business and pay very little tax. I was like, "Holy cow." That in itself is massive if you're a high earner because you're paying that check every year. So then the other thing that people talk about when they hear this is, "Well, oh," like your husband, "Is this legal?" At first, there's the, "Is this legal?" part, right? Then there's the other side of it. It's like, "Is this right?"
How Women Giving Back Approach Large Deals
Darin: Then what you realize as you start doing it is you're investing more where the government wants you to. That's why they're providing those incentives. You are purchasing a property and you're hiring contractors. You're hiring property management companies. You're providing affordable housing. So you're stimulating the economy in a way that the government wants you to, but in the beginning, I had a hard time accepting it until you start seeing the impacts of it.
Meetu: I agree.
Darin: When you walk across the property and all of a sudden one of the tenants comes out and says, "Thank you for putting in that playground or repainting the exterior of the property, or doing something." Because that's where they live and that's where their day-to-day lives are. And a lot of times they're referring their friends and their family to the same communities so they're all living there. So that's where you get good for the community piece of it. So I think that's fantastic. I love your story about that.
Meetu: Thank you. I appreciate it.
Darin: So talk about mindset because, I mean, it may not be as big for you because you were already buying businesses that had real estate. You were already an action taker, but there's some people that can wrap their hands around buying a single family house or maybe even a duplex but getting involved in a 150-unit or a 300-unit apartment complex. Well, that sounds too big. So what's your take on mindset both as a general partner and also as a limited partner in those larger deals?
Women Giving Back and Doing the Right Thing
Meetu: So it sometimes feels overwhelming going for big projects. Our first acquisition was 418 apartments.
Darin: That's your first acquisition?
Meetu: It was 418 units, yes. So when we were doing the acquisition and then people were coming to us and they were telling, "You are not doing the right thing." But if you have the confidence and you have the skills and you are with the right team, I think it's very easy and doable. It's less risky as compared to single family homes because there is economies of scale.
Darin: So explain that. Why is it less risky because of economies of scale?
Meetu: So if you are having a single family and you are having just one tenant and for some reason, that tenant is not paying the rent, you are losing 100% of your rent and you are responsible for paying the mortgage and all.
Darin: That's huge. I think that most people if they get into rental properties, that's their first avenue into is, "I'm just going to buy another house. I'm going to put a tenant in it," but there's a few things. One big thing is, like you said, if somebody moves out, you go from 100% occupied to 0%. Secondly, most, I'm not going to say all, but a lot of people when they get into that world, they don't necessarily know how to do all the numbers.
The Advantage of Multifamily
Darin: So they're like, "I'm going to look at what's the monthly rent. I'm going to multiply that by 12, and then I'm going to deduct my costs," but in a big multifamily property, we know that there's always going to be some kind of vacancy. Some people are going to be moving out, some people are going to be moving in. There's going to be time that it takes to get the units ready.
The same thing happens in a single family house. If somebody moves out, there's time to clean it up and market it and get a new tenant in. So you have to build in some vacancy. I don't think the single family people when they first get involved, maybe after they've done it a little bit then they start to see it. But when they first get in, they just think, "This is less risky," where we can see that it's actually more.
Meetu: Yes. Moreover in the multifamily, you can have your property manager and the property management team. While in a single family, if you hire a third-party property manager, you are not making any money. Most of the time, you end up being a landlord where you are getting all the calls, "Hey, this is broken. That is broken and it needs to be fixed now."
Darin: Yes. Another funny thing is I talked to this one syndicator that has been in the business for a long time, does large multifamily deals, and was like, "Darin, I'm just trying to refinance my house and it is a hassle."
How Women Giving Back Approach Challenges
Darin: It's so much harder than getting financing on a 200-unit or a 300-unit apartment complex. And people can't understand that," but the reality of it is the agencies or the banks, whoever's providing the loan for it is not really looking at Meetu or Darin. Or their financial situation as much as they're looking at what's the cash flow of the property and can that sustain the debt service. That's why it makes it easier. You don't seem like you have much fear but talk about fear for you and fear for your investors.
Meetu: Fear for my investors?
Darin: Fear for you.
Meetu: Honestly. I am not a very fearful person. I'm not scared.
Darin: I get the sense. I get the sense you're not very fearful.
Meetu: Yes. Any challenge that came in my path, I never get upset about it. I take it as an opportunity to grow. And whenever I step into business, I know that I am responsible for other people's money. So I am extra cautious and I'm always having a backup plan. So there is nothing, as long as we are doing all our work right, mitigating the risk at all aspects, there is nothing to be scared of, to be very honest with you.
Darin: So I mean, I think all syndicators want to do the right thing by investors and there's certain things that happen that are out of the control of a syndicator. In the last year, for anybody that had a loan that was floating rate, the debt service has gone up dramatically. So do you have any of those types of deals and how do you manage through that?
Risk of Loss Versus the Upside of Winning
Meetu: Yes. So that's the reason, as I mentioned when I was looking at the deals happening in the market that the people were overpaying for the assets and then going for this bridge financing or the floating rates, I was not very comfortable with it. I decided not to do any acquisitions. My investors were pretty much upset about it because we went full cycle and we gave extraordinary results in our first deal.
Then we were in the event of capital gain, and all that I honestly wanted to do, but when I saw that most of them, interest rates or floating rates and bridge financing, I knew it's not the right thing to do. So fortunately or unfortunately, I was not in any risky solution. I never do any such deals. I'd rather not do anything, but I try to take calculated risks.
Darin: You're very fortunate. There are a lot of people that have those types of deals out there. So I think that people are more afraid of losing than they are having the propensity to take a risk to win.
Darin: So you don't seem to fit into that category. I think that that's probably one of the values and one of the benefits of working with a syndicator is that the syndicator actually takes the risk and then goes to raise the capital, where some of the investors may not have been able to pull the trigger, but they're like, "Okay. Meetu is in. I'm in." So talk a little bit about that risk of loss versus the upside of winning.
Look for the Positive Scenarios
Meetu: Yes. So the risk of loss, I am seeing that fear that most of the people did bridge financing and it was 75% to 80% LTV, and that is expiring or will be expired. When they will go for refinancing or for new debt, it will be at lower leverage, right? So they need to bring more to the table, and it's going to be very hard. The cost of debt has gone significantly higher. There are all those sorts of risks involved, but then we have to look at the positive scenarios.
We are not going to be in this environment for long. If we can sustain it for 18 months or so, the interest rates are going to go down eventually. I believe by that time, the property prices should go automatically by 15% or 20%. So yes, there is a risk, but if you can have the ability to take control or the property might not be cash flowing if you are able to pay your expenses for these 12 to 18 months, and after that, look at the positive. You are still getting the tax benefits and then the property is getting appreciated.
Darin: Yes. I think that these deals, they're longer term. In the last few years, we had deals that were turning over into two years.
Meetu: Two years, yes.
Darin: Yes, but traditionally, they're a five-year business plan. Sometimes that actually helps because if you can ride out the low time, and with stocks, a lot of people when there's a downturn, people sell out and they get out because they don't want to lose more and then they don't know when they get back in.
Women Giving Back Has Advice for the Newcomers
Darin: All of a sudden the stock market goes up and they are like, "Oh, it's going to dip again, so I'll get back in the lower level," and it just keeps going up, and then all of a sudden they're locked out. They forced in their losses. Well, in these multifamily deals, you can't get out, right?
Meetu: You cannot get out, yes.
Darin: You lose the liquidity, and sometimes that's a bad thing and sometimes that's a good thing. So if you think about COVID, I know for certain there were some passive investors that if they had the opportunity, they probably would've sold. They probably would've even sold for a loss just to get out, and then 12 months later, they're getting a 150% gain.
So having people that they know and trust will ride it out. I love what you say because I think that in the medium to long term, rents are going to go up, property values are going to go up, but there will be hard times and you have to be able to ride through those hard times. So what's your top advice for somebody new coming into the industry? Let's talk about the passive investor and then the one that wants to get in on the active side. What's your top?
Meetu: Yes. For passive investors, education is the must, whether you are an active or whether you are a GP or an LP, you should know about the asset class, what are the risks, what are the benefits. The most important is the mindset and surround yourself with people who are doing the same thing. Surround yourself with like-minded people.
Surround Yourself With the Right People
Darin: Like-minded people, I think that right there is so critical.
People say education over and over and over again, but I think it's more than just listening to podcasts and reading books. You actually have to get out and talk to people and you talk to people and they say, "Yes, I've been doing this for five years, 10 years, and my returns are so much better than the stock market, and here's how it works." It's so different than reading it in a book. You're meeting real-life people, and real-life success stories.
Meetu: The definition of like-minded people are the people who are your role model. That's also something to factor in about. You don't want to surround yourself with a person who is doing 5,000 doors in the first year.
Darin: So you want to surround yourself with somebody that's doing, what?
Meetu: Doing a full-time job and then doing acquisitions back to back and then doing multiple. So you don't want to surround yourself and be in competition with those people.
Darin: Yes and that's a beautiful part about this business too is that some people can't relate to the guy who owns 500 million of assets. They're just getting started. They're like, "Oh, man. That guy has way too much experience. I can't even fathom that," but then somebody else that maybe they just invested in their first deal or their third deal, "Oh, I could relate to that more." So what's great is you have a choice.
The Helping Hands on Your Journey
Darin: There are people at all different levels, and as you get to the next level, then there's somebody above you that will help you get to the next level if you want. You still have to work to get there and you still have to meet those people, but it's amazing what can happen.
In the beginning, I'll just ask you, when you started investing, I mean, did you really think that you were going to be on podcasts and bringing investors and doing a 300 and some unit deal and a 400 unit deal? One thing leads to another, right? I mean, everybody starts with, what was your first investment?
Meetu: My first investment?
Darin: Yes. First real estate investment?
Meetu: It was in 2010. That was my personal condo that I purchased.
Darin: So it was a condo, right? You were probably nervous buying a condo. I don't know if you were, but that first one for everybody, it seems so long ago, but that's how you got started. Then you go and you start meeting other people and they start telling you about other products and how you can do it and then you get to the next level.
Then you help people get to the next level, but you started with a condo, right? Now, you're doing 300 and 400-unit properties. The other thing I say is that it's not just about you. In the beginning, it starts out just about you. You're trying to just build your wealth for you and your husband and your family, but then it's like other people are like, "Meetu, help me."
Learning Lessons for Women Giving Back
Darin: How do I do it?
Meetu: Yes. I help other people get out of the rat race, help them achieve their financial goals, and then you are doing good for the community as well. People are so happy to see that nice and clean swimming pool, all the amenities that you go. You go there, upgrade the gym and then people are running over there. It brings a lot of pleasure seeing all those things, changes in the life that you make in other people's life.
Darin: Yes. The people in the community and the investors.
Meetu: Yes. The investors feel happy too because they are doing good, and they're getting a return on their investment.
Darin: They all have a different reason for that capital. Some people are just building their wealth so that they can retire someday. For some people, that's a college fund for their kids or buying a car or vacation, whatever the case may be. So that's awesome. What learning lessons have you had, as you've gone up the ladder? What are some of the learning lessons?
Meetu: One of the biggest learning lesson that I had is jumping too soon into a partnership.
Darin: So talk about that.
Meetu: Yes. So when you meet people, you meet them in conferences or if you are a part of any ecosystem, you meet their people. You see their positive side and you like that person and think that he's an achiever. But when you are really into some project with them and some problems arise, then how that person acts and how capable that person is to handle that kind of stress, that's all our learning.
Choose Your Partners Carefully
Meetu: So if you are planning to be a partner, I would say get to know that general partner or the partner that you are picking very closely. I get so many calls. People want to invest in my Princeton project, in my development project. I got this guy. He met me for the first time on the Zoom call and he wanted to invest 1.5 million in my project because at that time most of the fundraising was done and only 1.5 million was left.
I didn't know that person very well and I said, "Sir, you don't even know me. I appreciate that you are trusting me so much and you know that this is a development project and still you want to bring that much to the table." But I was not willing to take that new investor into that project because I don't know how he will involve because it was a development project.
There could be some challenges come in between that I don't know. So I don't know how that person will react. Even though we were raising funds and it would have been a piece of cake for me, I decided not to take that process. So I'm very particular when I am taking a limited partner or a general partner. I do some due diligence. I just don't jump into the partnership.
Darin: That's great. So I was thinking when you were talking about partnerships, you were talking about general partnerships.
Meetu: I was talking about general partnership, but you should be careful with the limited partners too.
The Importance of Having the Same Values
Darin: Right. I thought you were talking about a general partner, but you were talking about both. So talk about on the general partnership side, what could you have done? You obviously had at least one partner that didn't react the way you would've wanted them to react in a certain situation, I'm guessing, based on the fact that this is a learning lesson. What would you do differently now? How would you have identified that ahead of time?
Meetu: I will personally do more closer, I will personally monitor a person closely. That time when I did a partnership, I was knowing that person but not to the extent.
So maybe prior to going into the partnership, I will spend some very good time with that person. I'll observe that person, how he behaves, and does he have the same core values that I have? Because for me, integrity and accountability are very important. I believe in doing the right thing, being transparent and all. So now, I spend a lot of time with the people with whom I'm planning to be a partner so that I know that they have the same core values.
Darin: That is exactly what I've heard from other people, other syndicators that have said that they've had troubled partnerships. Hasn't been that the partner was incompetent or couldn't do the work. It was that they had the situation and they looked at the world two different ways one wanted to handle a situation in a certain way, and the other one didn't really have the best interests of investors in mind. It caused conflict and he didn't want to be in that position again. I've heard that a few times.
The Next Step for Women Giving Back
Meetu: Most of the time, I believe, there are very rare people who don't have the best interests of the investors, but sometimes people's egos come in between, right? They do not necessarily have the required experience or the expertise, and just because they saw something, they think everyone should follow that.
Darin: Nice. So where do you go from here? What's the next big stretch goal for you? I mean, you've done so much in a short period of time. Where do you go from here?
Meetu: I am looking for more opportunities, but I am very conservative. So I have certain criteria. If they don't meet, then I'll not go for them. I am interested in two property types, and other asset classes. One is multifamily and the other thing that I like is assisted living family. I have been doing research in assisted living facilities since 2019. That's when I was planning to do an acquisition of one, but then the pandemic hit and that property type was hurt very badly.
So I was most like watching and observing, but now I am at a point where I see that it's again picking up. Because when I look at the projections and the demograph, after seven, eight years, there will be a lot of baby boomers. There are almost 10,000 people that are retiring every single day. So I see there is a lot of scope in that asset class, so I am looking into those as well.
Darin: That's huge. Now, assisted living facilities, it's different than multifamily because there's typically a business within the real estate. So now, you're going back to almost what you were trying to get away from with the daycare facility.
Women Giving Back Towards Assisted Living Facility
Darin: You've got the actual units that people live in, but you have to provide different medical services to tenants and that's a business in itself.
Meetu: Yes. So I started investing in multifamily, but I was not planning to exit the daycare industry. The only reason I exited the daycare industry was it was too much time-consuming, and my son was in 11th grade. So in 2019 I said, "My son is in 11th grade. 11th and 12th are two precious year for my son. After that, he will go to college and then he will go for a job." So basically, go for the work. So I thought, "He will be leaving the house in two years. I wanted to be with him for those two years."
So I told my husband that I want to exit this industry and invest in multifamily. Once he goes to college and I have more time, then I'll look into businesses. Childcare facilities, are good opportunities, but they are really very stressful because kids, they are very emotional. With the kids and all, and the ratios you look, it's very intensive, very labor intensive, right?
While this assisted living facility is very different because you are dealing with grownup people. It's not that stressful as compared to childcare centers. Plus, I have all those schools. I was running a licensed childcare facility. So I know what the regulations are. I am into real estate. I know the real estate part, and I have done research in nutrition on cardiovascular disease. So I know what role nutrition play in most of these diseases.
Women Giving Back to the Old People
Meetu: So I feel like I have a lot of values that I bring to the table. For me, it's all about giving back or making an impact in other people's life. I go to a few facilities once in a while when I am thinking of acquisition. All those facilities are so depressing. So I really want to make an impact, I believe, because I'm a very spiritual person also. I do meditation, I do yoga, and all. So with all my skills, I think I can do something different in this asset class. That's the reason I want to go into it.
Darin: That's pretty awesome. So you have a great background for it because you have the childcare facility that was running a business in real estate. Then you have multifamily, both value add and new development. Then you take all those skill sets, plus the real estate background, take all of that and bring it to living care. I think it's a winning equation. Now, you're going to have the flip side in that business that you have. You're dealing with adults, the older people, but you're also dealing with their children.
Darin: Their children, a lot of times, are the ones that are having to manage and provide the financing potentially. So it's flipped. Instead of the parent coming in and being all concerned about their kid, it's the child being concerned about how mom and dad is being treated.
What Meetu Bhatnagar Likes to Do for Fun
Meetu: Absolutely. I personally get all involved even if I'm an operator, I get very personally involved with the operations. When I was a business owner, I was very closely involved with the operations. So I know whatever facility I'll run and it'll do good. So no one will be upset with any of my employees.
Darin: That's fantastic. So what do you like to do outside of work for fun?
Meetu: I like to go out with my friends. I'm very social. I have a lot of friends. And I enjoy meeting them. I don't watch TV at all, but I do love music. I listen to music, and then exercising, meditation. I'm a continuous learner. So every day at least, one or two hour, I spend in learning something new.
Darin: That's awesome. How do you do that? You read books?
Meetu: I read books and then I watch all those videos and I keep myself enrolled in one thing or the other.
Darin: Fantastic. Well, I appreciate you coming on. Now, if people want to get to know you better, what's the best way for them to do that?
Big Things for Women Giving Back
Meetu: They can reach me directly on my cellphone. It's 214-674-9867 or they can go on my website and reach me out through there.
Darin: Can you share the website?
Meetu: It's www.jmdacquisitions.com, I do have one Wealth Evolution Club. I have not been able to give too much time to it, but I made this with the mission to empower my investors. So I constantly send out educational content. So if someone wants to be a part of the Wealth Evolution Club, they will get all those newsletters and podcasts that I am planning to do very soon.
Darin: Fantastic. Well, I'm glad I got to know you better.
Meetu: Thank you.
Darin: Because I think you got big things coming. So I appreciate you coming on. I appreciate you sharing. For the listeners, I hope that you enjoyed that one. Until next week, signing off.