F2494: 3 Steps to a Luxury Investing Experience with Veena Jetti
Growing up in a real estate family, Veena Jetti knew she had to leave corporate real estate and start investing for herself. After learning some valuable lessons in her first deal, Veena now has a portfolio of $400M in assets. She talks about the best time to raise capital, and her step-by-step systems and process she uses to provide a “luxury” real estate investing experience.
Veena Jetti Real Estate Background:
- Partner at Vive Funds, a large multifamily syndication
- Grew up in a real estate family
- Portfolio consists of $400 million in assets
- Based in Dallas, TX
- Say hi to her at: www.vivefunds.com
- Best Ever Book: Blink
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Theo Hicks: Hello, Best Ever listeners, and welcome to the Best Real Estate Investing Advice Ever Show. I’m Theo Hicks and today we’ll be speaking with Veena Jetti.
Veena, how are you doing today?
Veena Jetti: Hi, Theo, I’m good. Thank you. How are you?
Theo Hicks: I’m doing well. Thanks for asking. Thanks for joining us today. Looking forward to learning more about you. So Veena is the partner at Vive Funds, which is a large multifamily syndication company. She grew up in a real estate family and now their portfolio consists of $400 million in assets. She is based in Dallas, Texas, and her website is https://vivefunds.com/.
So Veena, do you mind telling us some more about your background and what you’re focused on today?
Veena Jetti: Yes, absolutely. So thank you for having me. I always tell people, I kind of took the shortcut into multifamily, because I come from a real estate family. So my mom is actually the one that was a successful real estate investor for her career; they started investing in real estate 30 something years ago. And then I went to undergrad, did my degree in finance, graduated when I was 20 years old, and thought I was going to do something really revolutionary and different, so I went out and I worked in corporate real estate. I think my mom was giving me a lot of side-eye for not coming in and working in the family business. Ultimately, I’ve made a lot of money for a lot of other people, left corporate America back in 2012 and decided to go out and invest for myself. The catalyst for that was it was the first year my husband and I paid taxes jointly. I called my mom up and said, “Mom, our tax bill was just crazy. What am I doing?” And she was like, “Well, you should look into getting full-time real estate professional status, go out, start your own business, be a real estate investor.” So that’s exactly what I did. And now today, we obviously have grown our multifamily portfolio; we focus on large value-add assets, Class B, typically 1985 vintage and newers is what we like to do. [unintelligible [00:02:41].18] is our bread and butter.
Theo Hicks: For the syndication business, what do you focus on? What’s your main responsibilities for that?
Veena Jetti: I actually touch all parts of my business. I actually oversee and set processes and make decisions across the entire business, but my focus and what I really enjoy the most, quite frankly, is the investor side. So anything that has to do with a capital raise and the interaction with our investors, anything external facing, that’s where I actually really enjoy spending most of my time.
Theo Hicks: Maybe walk us through your first syndication deal. And since you focus more on—I know you said everything, but since your main focus is on the investor side, talk about how you were able to raise capital for that first deal.
Veena Jetti: Yes, it was really hard. I feel like I thought we were not going to make it; it was very difficult. The first raise is always the hardest. I was going to everybody I knew – uncles, aunts, friends, family, everybody. And it was tough to get a cheque. Everybody’s excited and interested until it actually comes time to write the check. I remember there were nights where I was like, “Oh, my gosh, we’re not going to be able to close, we’re going to lose all of this earnest money, and we’re not going to close this deal, and the reputational hit is going to be something I can’t put a price on.” So it was actually a matter of being persistent and continuously talking to everybody in my network.
At one point, I remember turning to my husband and being like, “Honey, we have to sell everything that we own because I need the cash to put into the deal ourselves.” He was like, “What are you talking about?” I was like, “I need a million dollars right now.” And he’s like, “What? I don’t understand what that means.” He’s not in the real estate world at all, so he totally does not see anything from the real estate side or syndication side of the business. And so he was like, “Okay, well, whatever we have to do, we’ll do.” So really, his support is what I think got me through that first raise. After the first raise, it becomes significantly easier to raise capital. On the last deal we did, we put out a $26 million offering and — I mean, you still lose sleep, but it’s for different reasons, right? It’s not because you’re not sure if you can raise that capital or if you can make any shortfall [unintelligible [00:04:58].12].
Theo Hicks: So it sounds like for the first deal, you had the deal first and then the money second. So for someone who is interested in doing syndications and wants to transition to doing larger deals and raising capital, based off of your experience, do you recommend that they find the deal first, and then call all their uncles and cousins and friends or the other way around?
Veena Jetti: No, no, no, that’s absolutely the worst way to do it. Because everybody always says, “Oh, find a great deal, and then the money will come; the money will follow the great deals.” And that’s true, but also it’s not really that true. So no, no, don’t do what I did. Actually, now, I think the reason that we’re able to raise capital as efficiently as we’re able to is because of two things. One, I am never raising capital, while we have a deal. I am going back to relationships that I’ve already established before there’s any project or offering on the table. So one is raise that capital in between your deals.
And secondly, set up your systems and processes so that you can be efficient when you do have a deal on the table. Because once you have a deal, it is very tough to be making hundreds of phone calls one-on-one with investors and explaining what the deal is. You might have that relationship, but if it’s like your aunt, they don’t know you as Veena, the real estate investor, right? They know you as Veena, the two year old that I used to play with in make-believe.
So that’s what I think raising comes in between talking about what you’re doing, explaining how it works, answering generic questions, so that by the time I do have an offering or I have something that is investable, my investors already know who I am, what our strategy is, what our background is, our vision, track record, et cetera. The only thing that they are looking at at that point is the actual deal metrics and what’s happening on that specific asset.
Theo Hicks: One thing you mentioned there is to have the system and the processes, because it’s very difficult to do one-off emails and one-off phone calls with hundreds of investors. So could you walk us through your communications system with investors, starting from before you even have a deal? So you mentioned you had your communication with them before you have a deal, and then bring us into what you’re doing to communicate when you have a deal. And then after you have a deal how you’re doing the ongoing communication, sending the financials, tax statements, things like that.
Veena Jetti: So I’m actually really terrible at content creation, which I know you guys do exceptionally well… So I don’t focus on content creation in between my deals. I tell my investors “You’re not going to get a weekly or monthly newsletter from me about real estate happenings, because I’m just not good at it.” So what I do is in between deals is actually when I try to do my one on one calls with investors.
So I like to intake calls with every investor, if possible. It’s not highly scalable, but it’s part of the experience of investing with me, and it’s something that I want to make sure I keep front and center, even as we continue to grow. So I always joke and say, “I want to be like the Chanel of real estate investing.”
Theo Hicks: Nice.
Veena Jetti: Because it’s luxurious and an experience, right? So I do all these one-on-one in-take calls. Actually, right before we hopped on this call, I was on a call with an investor from the UK who found me on social media and he’s a professional athlete. So just making those connections and cultivating those relationships. And I don’t have a deal right now; I don’t even know that he’s ever going to invest in a deal with me, but maybe. So what I do is I cultivate that relationship before there’s a deal.
Once there is a deal, I send out communication, we have a portal, we push everything out through the portal, we typically will schedule a conference call within a week of an offering going out. The conference call is something we use as a tool to add color to the offering memorandum.
What I used to do when I first started was, I would walk through the OM and read through the pages and touch on the pages… But then I was like, “These are smart people who are looking at investing 50k, 100k, 200k, a million dollars; they don’t need me to read what’s in front of them to them. What they need is the actual color that can be added, that we can’t put into an OM.” So I’ve started focusing more on that conference call with adding color and detail to the project, and why we like the deal, and what we’re looking at, and all of the non-tangibles that you’re not going to put into an OM. And that’s what we do on our conference call. By then usually, we’re pretty much committed or overfunded and on a waiting list, and then we start going through the waiting list.
And what I meant too by systems and processes is also having the system and process and recording and tracking set up to be able to say, okay, investor A has indicated $100,000 of interest, and they filled out the soft commitment, now they need documents. Okay, they received their documents on this date, they’ve opened it, but they haven’t signed it yet; we need to follow up and find out if there’s any questions around it, or if there’s anything that they have unanswered that they need before they can actually commit to the project. And then once they sign it, it’s the follow up with your wire instructions, “Hey, I received your wire”, sending out the closing emails. And then follow-up communication on a monthly basis, financials on a quarterly basis, making sure deposits are hitting the bank accounts appropriately. So all of those things, I think if you can set up a system beforehand, it actually makes it a lot better, while you’re running the deal.
Theo Hicks: Is that all through your portal? You mentioned a funnel, the progression that they go through once they’ve opened that first email or submitted a commitment. Is all that tracked through the portal? Are you doing that with tags and MailChimp or something?
Veena Jetti: I used to do it through Google Form is what I used, because I put it onto an Excel sheet and then I could track through the Excel sheet. Now, I have shifted over to using our portal as our primary source of pushing information out and taking information in. And also we’re pretty big about security. So having wire instructions, the ability to push it out through a secure system makes me feel a lot better, because I know there’s a lot of wire fraud that involves intercepting emails.
So the other thing I always tell all my investors too is, if you have even a teeny, teeny, teeny doubt about where you’re sending funds, don’t send them until we can talk. You know my voice, you know how to reach me. Reach me on my cell phone or get in touch with me on a number that you know you can reach me on and burn those verbally.
Because once the money is gone, it’s gone. There’s nothing any of us can do about it. And I’ve definitely heard of investors that have had this happen to them previously. It’s just unnecessary, and we can take such simple steps to prevent that.
Theo Hicks: And then just really quickly, after you have a deal and you’re doing those ongoing communications, are you doing that through the portal as well? Or it’s kind of doing a deal update – is that pretty manual? Are you like tapped into your property management software and sending out automated updates?
Veena Jetti: Actually, we’re still doing it semi-manually. So what I’ve done is I actually have certain metrics that I like to see, that we see on a weekly basis anyway, as we’re managing the asset post-close. But for the investor newsletter specifically, there are certain things I like to look at and I like to report to investors that I recognize that my investors want to hear about, certain trends.
So what I do is I actually have a JotForm, which is similar to Google Form, but it’s more robust. So I have a JotForm, I send it out to our property managers, they input the data from the last month’s financials, and it’s like, I set it up as a fill-in-the-blank or choose from the drop down, etc. So, what they do is they fill all of that out. I take that information, I extrapolate what I need and I put it into our newsletter and I manually will send that out, or I’ll send it out through the portal, depending on which project it is.
Theo Hicks: That’s J-O-T form, JOT?
Veena Jetti: Yes, JotForm. J-O-T Form.
Theo Hicks: Interesting. And then what metrics do you send your investors every month?
Veena Jetti: It depends on the asset really, because there are certain things that we will start tracking; for example, on one asset when COVID hit, we had a lot of CDC declarations and we had a lot of delinquency and bad debt. So I know that’s something that’s concerning for investors, and I kind of track what we’re doing toward it. So I might say, “On 123 Main Street, we had X number of CDC declarations. We’ve been working with them to reduce the balance by doing A, B, C and D. The action plan. We reduced delinquency from (whatever) $100 down to $20 over the last month,” or whatever that looks like. So those are the metrics I look at on that asset.
But generally speaking, we report on occupancy, leasing and marketing, delinquency, lease tours, maintenance and resident events.
And then this time of year, in the early part of the year, I’m usually also talking about taxes, because that’s usually the question I get the most in the first quarter of the year. So I’m talking about, “Hey, this is what you can expect from taxes. We’ve submitted information to CPAs; we’re at their mercy, we’re waiting for them to give us the K-1s back. As soon as we have it, we’ll send it back to you, either password protected or through the secure portals.”
Theo Hicks: Okay, Veena, what is your best real estate investing advice ever?
Veena Jetti: Oh, my gosh, I think it is—actually, it’s a quote that I love, because it’s so applicable. It’s “The best time to plant a tree was 20 years ago, and the second best time is today.” So people get stuck in analysis paralysis all the time. And quite frankly, I probably should have gotten stuck in that on some of my earlier deals where I wasn’t sure how we were going to raise on it… But you know what, I’m glad I did it. I’m glad I jumped in, because the first deal is absolutely the hardest. Once you get that monkey off your back, it is a lot easier to move forward. So just get started. Find good partners, find good people to network with, who can help you through it. Theo, I know you and Joe and everybody provides a ton of value and a ton of information, so find people like that in your network and utilize their knowledge and leverage their access and ability to help you grow your business.
Theo Hicks: Okay, Veena, are you ready for the Best Ever Lightning Round?
Veena Jetti: Well, I don’t know. I’ve got to like warm up. Alright, I’m ready.
Theo Hicsk: Alright. First, a quick word from our sponsor.
Theo Hicks: Okay, Veena, what is the best ever book you’ve recently read?
Veena Jetti: Oh, okay. So this is not exactly real estate-related, specifically, but it’s something that I think is a really good book and every entrepreneur should definitely read it, especially if you’re an expert in your field. It’s a book called Blink by Malcolm Gladwell. And it talks about gut reactions and why instinct is really important even in decision-making in the business world.
Theo Hicks: If your business were to collapse today, what would you do next?
Veena Jetti: Starting up again.
Theo Hicks: What is the best ever way you like to give back?
Veena Jetti: Oh, I am really involved with philanthropy. I do a lot of charitable giving. We do it through charity donations, but also – one of the things I actually like to do with my deals is, every time we close a deal, kind of ritual tradition is we pick a charity to donate to, and we make a donation. The last one we did was the Susan G. Komen Breast Cancer Awareness Donation, and I actually encourage all of my investors, everybody that touched the deal, I ask all of them to join us in doing the same thing and making a small donation. And I do a lot of grassroots donating. So when the pandemic hit, I was gathering as many N95s as I could, I was shipping them to physicians all across the country, our friends, family, everybody. So I like to get involved on the grassroots level as well.
Theo Hicks: Nice. And then lastly, what’s the best ever place to reach you?
Veena Jetti: You can reach me on my website. I have my portal up there, it’s https://vivefunds.com. And you can just go to the portal and you can sign up there and schedule a call and I’m happy to answer any questions or anything like that for anyone we can connect.
Theo Hicks: Perfect, Veena. Thank you so much for joining us today and providing us with your best ever advice. We started off by talking about why you think it’s best to have the money first before you have the deal, because the deal first is the worst way, and you kind of explained how you were going crazy for that first deal to kind of gather all that capital. And then we went into a lot of details that deep dive into your communication is process with investors. So what you do before deals, give them that Chanel, luxurious experience with one-on-one phone calls. And then once you have a deal, you push everything through your portal and do a really good job tracking, commitment and following up with your portal.
And then you talked about your conference call as well, and how you don’t just read the offer memorandum or the investment summary, but you’re trying to add color to the OM about why you’re doing the deal and focusing on the non-tangibles. And then after the deal, you mentioned that you use JotForm, which I think is fascinating, that you send your property management companies the fill in the blank drop down menu that they can input the metrics that you want them to track. And then you’ll take that and put that into the newsletter. And then you talked about how the metric kind of depends on the asset, and obviously, what’s going on in the market. During COVID, the metrics were a little bit different, focusing more on delinquency, bad debt, number of CDC declarations… And then the action plan, which I really liked.
And then also generally just occupancy, leasing, marketing, delinquencies, tours, maintenance, residence events and then of course, right now, taxes. And then your best ever advice, which was the best time to plant a tree was 20 years ago and the second best time is today. Something to inspire people to get out of that analysis by paralysis rut.
So Veena, thank you so much for joining us today. We really appreciate it. Best Ever listeners, as always, thank you for listening. Have a best ever day and we’ll talk to you tomorrow.
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