Best Real Estate Investing Advice Ever Show Podcast

JF998: How an Anesthesiologist Built a Brokerage that FOCUSES on Investments

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Still an anesthesiologist, he grinds away at real estate focusing on investments although he appears to be a retail professional. He can do it all, commercial and residential, but his niche is investment properties in the bustling Dallas-Fort Worth area.

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Amir Baluch Real Estate Background:

– Founder and Principal of FundingNest.com
– Provides turnkey investment opportunities to investors and his physician colleagues from around the globe
– Also a licenced realtor, owner of Investment Club Realty, LLC, and holds series 63 and 22 securities license
– His team has closed over $450M in real estate
– Based in Dallas, Texas
– Say hi to him at http://www.baluchbulletin.com/eonfire
– Best Ever Book: How to Win Friends and Influence People

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investment brokerage

 

Joe Fairless: Best Ever listeners, welcome to the best real estate investing advice ever show. I’m Joe Fairless and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any fluffy stuff.

With us today, Amir Baluch. How are you doing, Amir?

Amir Baluch: Pretty good. How’s it going, Joe?

Joe Fairless: It’s going well, my friend, nice to have you on the show. A little bit about Amir – he is the founder and principle of Funding Nest. His team provides turnkey investment opportunities to investors and his position colleagues all around the globe. He’s also a licensed realtor, as well as the owner of Investment Club Realty and holds a series 67 and 22 securities license. His teams closed over 450 million dollars in real estate. Based in Dallas, Texas… With that being said, Amir, do you wanna give the Best Ever listeners a little bit more about your background and what you’re focused on?

Amir Baluch: Sure. My whole goal growing up was actually just to focus on being a doctor, but then I started learning that 80% of the multi-millionaires generated their wealth through real estate, so at the age of 21 I jumped into it head first, with no mentors; we didn’t have access to podcasts like Joe’s here, where you could get information from other people. I was just pounding my head against the wall, but eventually, a few years later I started investing alongside a private reach and multifamily; a few years after that I got my real estate license, I started putting deals together and putting together a team to help grow my real estate investment business, because I knew that this was the key for me. It wasn’t gonna be just going to work at the hospital every day for the rest of my life,

Through that process — as you mentioned, Joe, we have our own brokerage… I believe we’re the only one in the metroplex that focuses solely on investments; we really don’t mess with the retail side of it that much, although we won’t turn down the business, but we don’t focus on that. We do both commercial and residential transactions, developments, fix and flips, and we also coach other people just like you. We like to share our knowledge with other people, because I know what it’s like to not have knowledge. That’s how I got stuck when I was younger, getting into this game, so I love giving back to people, giving as much advice as I can, and that’s kind of where I’m at in my life right now.

Joe Fairless: And are you doing anything with the doctor route?

Amir Baluch: Yes, I still do anesthesia. Usually it’s from 7 AM to about noon, which leaves me most of the day. Some days I take off completely, but I have definitely more than 40-60 hours/week to give to real estate.

Joe Fairless: That’s incredible. 38, you started at 21, and you have some securities license, and you have a brokerage, you are also an anesthesiologist, I guess… Right?

Amir Baluch: Yeah, I just can’t sit still.

Joe Fairless: You can’t sit still, no kidding.

Amir Baluch: I love to learn.

Joe Fairless: Yeah, so let’s talk about how you balance your time. How do you figure out what to focus on?

Amir Baluch: A couple things – I’ve taken a lot of time management courses, and you learn a few tricks here or there, but the number one thing, you have to be very conscious about your time and understand that there’s a certain amount of hours in the day, and prioritize things. There some type of a chart or like a square you could make where you have urgent/not urgent, and then you have important/not as important. You put things into those categories, you figure out what needs to be done now at this given moment based off of that, you prioritize, and eventually the things that don’t really matter that much, you procrastinate on those intentionally, or you can outsource so much with virtual assistants, people in India, the Philippines, bringing people to pick up the phone for you… There’s so much virtual stuff on there, so much technology we have to increase our own free time. I definitely recommend for people to take a look at that. So that’s the key for time management.

Joe Fairless: Do you actually create a chart every day?

Amir Baluch: Not every day, but I have a long list of things to do that has up to 70 things on it. Instead of having those blocks, I actually have it color-coded based on which block it should be into, like what’s urgent, what’s not urgent. A lot of times I don’t have to put too many things in the blocks, because as soon as I see something that’s a time waster but needs to be done, I just immediately outsource it. I don’t even want it to take up space in my brain, I don’t even wanna think about it, so that’s what I do.

Joe Fairless: And who do you outsource it to?

Amir Baluch: For example, I wanna build a call center right now – it might take me a couple hours to actually do the Google research and figure out who’s good at what and what the prices are. I’d have a virtual assistant that for $10 will do all that searching for me and just give it to me in a nice Excel format, and I’ll just call up the best one and that’s it.

Some of the marketing material, too – I used to try to do it all myself… It doesn’t make sense to do that. You have websites like Fiverr.com, or even Upwork, and you can outsource this thing for much less than what your time will be worth if you’re in the real estate investing world. Even content creation sometimes, like a quick blog post or something like that… Although the ones that I publish with my name behind it, I’ve gotta do those myself because it’s too hard to find somebody to put all that stuff together. But just some small things like that you can outsource, and the most important things are things that really will make money or make an impact – those are the ones that I’ll handle myself, such as negotiating the contract, face-to-face meetings with a new partner, visiting a plot of land for development… Those things you can’t outsource. But that’s what I’ll focus my time on – those critical elements of a transaction.

Joe Fairless: What service did you hire your virtual assistant through?

Amir Baluch: I can’t even remember. I use different ones, depending on what I want done. For example, Google searches or keyword searches, things like that, I’ve used so many different ones, and they all have strengths and weaknesses; it just depends. I used some on Fiverr, I used some on Upwork, and they’ve been from all over the world, but it really just kind of depends what I’m looking for. If the English is kind of tricky, I definitely don’t wanna hire somebody from India; I need somebody that’s fluent in that.

If I need something for a medical background, for something like that I’d definitely need to hire somebody with an M.D. or some type of healthcare background, so you’re not gonna find that on Fiverr, most likely. Sometimes I just ask other friends that I know use virtual assistants, they give me some recommendations, too. It’s kind of a conglomerate of all that.

Joe Fairless: What’s the primary way you make money?

Amir Baluch: Right now it’s probably 50/50 anesthesia and real estate.

Joe Fairless: And within real estate specifically, what’s the number one way within real estate that you make money?

Amir Baluch: Right now most of it is coming from our fix and flip transactions. We’ll probably make anywhere from 20k-60k a pop on that net. Number two would come from the retail side; we usually clear about 5-6 million a year in transactions just on small retail deals. Number three would be wholesale.

Joe Fairless: Okay, that makes sense. Fix and flip transactions, retail brokerage, and then wholesaling. What is your focus? You’ve just mentioned the call center – why a call center? What will that do for your business?

Amir Baluch: Well, the game is really just about leads. In any business you need leads. If you get leads, you can be successful in any business and you could build the infrastructure to handle the leads. What I wanna do is get large, commercial leads and investor leads because the limiting factor for me a lot of times is getting the capital to close on these larger developments, which that’s where our next move is gonna be. So if I have a call center, calling people, prequalifying them, see what they’re interested in, if they wanna invest with me passively, we’ve got all that ready to go with Funding Nest, or just one-on-one partnerships, it doesn’t have to be a security… Or if somebody doesn’t wanna partner, some people just like to own things outright, they don’t like any partners – that’s okay, because we can handle the retail side and we can broker them the deal, depending on what they’re looking for.

We need both those lead sources to scale up, and so instead of me making the phone calls all the time, I’m just gonna generate some scripts, form a call center; we’ll just have the person sit in our office here in uptown Dallas, and for maybe 4-5 hours a day just make the phone calls and run through a script and we’ll see how many leads we get, and we’ll keep on tweaking the system until I’m getting so many leads that I won’t be able to handle it.

Joe Fairless: With the leads, what are ways you generate them?

Amir Baluch: Right now a lot of it has just been networking. We do a lot of coaching — or my brother mainly does a lot of the coaching at a group called The Real Alliance in Dallas, so we teach other investors how to do fix and flips, and they can either partner up with us from day one, or a lot of times what happens is they try to do it themselves and then they come to us to bail them out. When we come to bail them out, we really just take over the project and that’s kind of like a lead.

Or somebody will come in and they found a deal but they don’t have the money and they come to us and then we close on that, so we get leads like that, we’ll pay them a wholesale fee. Or somebody doesn’t know what they’re doing – we’ll give them a script and tell them to knock on some doors and find leads like that, and then we’ll pay them 5k-10k once they give us a deal that we approve. The more we give and the more we share, the more leads we get. It’s really interesting how that concept works.

Joe Fairless: What’s the main project that you focus on, besides the call center and scaling the leads? What’s another main project that you’re focusing on right now as it relates to the real estate business?

Amir Baluch: We have two big projects that we’re working on right now. We want to build a subdivision in Fort Worth, which I think you know a lot about Fort Worth – it’s a historic district, it’s just South of 7th Street. We bought 30 plots of land, and it’s just the next progression after fix and flips; it’s actually easier to build a home than it is to tear down a part of a house and then build on top of that. Doing a subdivision is almost like doing 30 fix and flips with less headaches. We should be breaking ground on that in about two weeks. That one project will probably net us more money than we’ve made in the last three or four years with the fix and flips, and it’ll be easier also.

Another deal we’re doing is on the commercial side… I actually have a conference call with the attorney in about an hour after this podcast. There’s 20 acres for a commercial development; we already have 15 acres almost sold off to a group that will build multifamily on it, and they’re buying it at a high enough price where the remaining acres we’ll own free and clear… So within nine months of completing this transaction, we’ll have about three million dollars worth of frontage on a highway on free and clear to do whatever we want. We could flip the land, we could develop it, we could hold it for a while… So that’s another deal we’re working on even right now, in the next hour.

Joe Fairless: That sounds like a lot of fun, both of them, and for different reasons. You have 20 acres… How much will you have left? About 5 acres – what are your plans with that, and do you have investor dollars in that deal?

Amir Baluch: I have a couple people that will put in the money right now, but it just depends on what kind of partnership structure they wanna have, so I’ll definitely be negotiating with both of them, and I would wanna partner with the ones that could bring in the most value outside of just bringing money…

Joe Fairless: For example?

Amir Baluch: For example, let’s say if a commercial developer wants to invest in this deal, with his knowledge and resources, he might have some tenants in his back pocket; I’d rather have him invest, because if we decided to build it and get tenants, while we’re closing on the deal, he might already get some LOIs (letters of intent, for the Best Ever listeners out there). If he gets some letters of intent before we even close on the transaction, we could immediately get the construction loan and start building, so it really can turn a speculative deal into a home run just by having those contacts, whereas somebody who’s just passively investing and can’t bring anything else to the table, well, they’re just bringing in some dollars, but that’s pretty much it. They’re not actually adding value to the deal outside of that.

Joe Fairless: And you’re referring to the five acres, right?

Amir Baluch: Correct.

Joe Fairless: Okay. Did you acquire the 20 acres – the original transaction – with investor dollars, or your company’s own money?

Amir Baluch: Well, actually it’s under contract right now and it’s gonna be assigned to me, so somebody else could have closed on it, and through the grapevine it got into my hands, because they know I like these types of transactions, so I’m kind of negotiating terms with the person who wants to assign it with me, at the same time trying to figure out what my next move is gonna be, whether I wanna sell three-quarters of it to the multifamily developer, or I might even keep that and do residential deals. So even this minute right now, my brother is doing due diligence on the residential side and crunching some numbers to see if that makes more sense for us to do.

Joe Fairless: What is the process for doing the due diligence on the 20 acres? How do you know which option to go with?

Amir Baluch: That’s a good question, because a lot of people can’t answer this. This is why I don’t advise anybody to go out there and just buy land. When you buy land, you definitely have to know what the best use is – is it commercial? Is it residential? If it’s commercial, which asset class? You wanna do multifamily, should it be office, should it be retail? So we put together proformas for each one of those options. A proforma is just lining up all the numbers with costs and income to see what will generate the most amount of money for the money we put into the deal. We kind of already know what retail will do based on current comps. We are figuring out what will happen if we do residential, and if it becomes multifamily, we’re actually just selling the land, and we know what the sale price is of the land, so we know how much money we’re making there.

For example, let’s say if we wanna do residential, my brother is looking at what the sales price would be, the days on market, what our costs are gonna be… This is raw land, we have to know what’s the cost gonna be to actually make it useable; is the city gonna get in the way? Are there any restrictions? What if we’re forced to have some roads in this 15-20 acres – now we can’t build as many houses. Let’s say it was a home run building 100 homes; well, if the city gets in the way, they’re like “No, you can only build 60”, well, there goes 40% of your net income.

Every single step of the way you have to plan it all out as fast as possible, and see which one is the safest, at the same time makes the most amount of money for the dollars you’re investing, and over what period of time.

Joe Fairless: You all haven’t done ground-up development yet, correct? Did I hear that earlier?

Amir Baluch: We’re actually partners with people doing ground-up development, but by ourselves we haven’t done it.

Joe Fairless: On the subdivision in Fort Worth will you be partnering with someone who has, or are you doing this on your own?

Amir Baluch: That one’s gonna be our first project where we’re doing it ourselves.

Joe Fairless: And what allows you to sleep at night knowing that you’re not partnering with someone else and you haven’t done it before?

Amir Baluch: Because building on a lot that has already been developed to put a house on is easier than the fix and flips. Imagine doing a fix and flip but you don’t have to tear anything down. For example, the real numbers would be that each lot is averaging about $15,000. Our all-in costs to build the home is about 75k-85k, and it’ll take about four months. We already have buyers for all the homes in California, or even my friends will buy them as turnkey rentals, and the sales price will be about 140k. So we already have the end buyers, we know what our costs are, the land is already pretty much developed, we’ve just gotta put a house on it. It’s probably the easiest way to get started in residential development.

Joe Fairless: What do you think they rent for?

Amir Baluch: They’re gonna rent for right around 1%, maybe a little bit more. 1% meaning whatever the purchase price is. If we sell it for 140k, you’re probably gonna get about $1,400 of rent a month.

Joe Fairless: Okay. How many homes will be there?

Amir Baluch: 30 homes.

Joe Fairless: So you’re projecting roughly a $30,000 profit per home?

Amir Baluch: Plus or minus… It’s gonna depend how much we end up paying to the investors also. But the total project should net a little over a million dollars when we’re all said and done.

Joe Fairless: It’s exciting stuff, thanks for sharing that. Amir, what is your best real estate investing advice ever?

Amir Baluch: The best advice I have for all the Best Ever listeners our there would be to find ways to partner with people that know more than you and are bringing value to the table. The reason I say this is when I first started getting involved in real estate (this is when I was 21), I couldn’t get anything done. I was going to the courthouse and getting a paper version of a list of foreclosures and running around… It just takes a long time to learn the hard way on your own. It’s better to partner up with somebody that’s been there, done that; it accelerates the process of you being successful, and it decreases the chance of you losing any capital or any sweat equity you have in the deal.

Even if by partnering you make a little bit less, at least you’re making some money, or you’re more likely to make money, and you’re gonna do it in a shorter amount of time. Then as you learn from your partners, then you can become more and more independent. That’s probably the best advice I have. You can apply that to anything, not even just real estate; it could be any type of business, or even if you wanna learn to play the guitar, or really anything that you wanna be good at, partner with somebody that’s better than you and that’s bringing value to the table.

Joe Fairless: I’ve witnessed that first hand in my own business, and I embrace that Best Ever advice, that’s for sure. Are you ready for the Best Ever Lightning Round?

Amir Baluch: Sure.

Joe Fairless: Alright, let’s do it. First though, a quick word from our Best Ever partners.

Break: [[00:21:11].02] to [[00:22:03].23]

Joe Fairless: What’s the best ever book you’ve read?

Amir Baluch: The best book I’ve read is probably gonna be Dale Carnegie’s “How To Win Friends And Influence People.” The reason I say that is the principles in that book last forever; nothing has changed in the decades the book has been out, and it’s especially applicable to real estate because real estate is really a people business. If you can’t work with people, you can’t manage people, if you can’t have a conversation, you can’t get people to remember you, good luck… You’re probably better off just doing something like IT or building apps or something. It’s just not gonna work. All the deal flow you get, building relationships – that’s kind of like the grease behind everything that makes things run smoothly; it’s being able to work with people, and that’s the best book, “How To Win Friends And Influence People.”

Joe Fairless: If no one likes you, then stop listening because you might as well do something else, and go listen to a podcast about building applications on your phone, right?

Amir Baluch: Right, exactly. [laughter]

Joe Fairless: Best ever deal you’ve done?

Amir Baluch: I would like to say closing on these 30 plots of land, because it’s really the next progression of where we’re going – it’s gonna be 30 fix and flips. Our basis in the deal is excellent; we probably bought this land about 60-70 cents on the dollar for what it’s worth, so there’s really no way we can lose on this. We could flip the land anytime. And really, 30 fix and flips, we’ll say if it took us two years to do that, then we could knock this out with very minimal time, so that’s probably my best deal there, closing on that land and building on it, which is gonna happen in about two weeks.

Joe Fairless: How did you get the price to be 60 cents on the dollar?

Amir Baluch: Well, it was some distressed property that was taken back by the city of Fort Worth, and we had an in with somebody in the city, and they were looking for somebody to help turn around the neighborhood a little bit, develop it and bring more people to that area, and they wanted it to be kind of renovated, and not a lot of people wanted to jump into that area, but we were, and they liked us, because my brother and I both have read that Dale Carnegie book, so… [laughter] They decided to sell it to us, and that was it. We beat out a couple other developers that were putting in offers at a higher price than us. We still got it at a lower price, even though offers were 10%-20% higher than our offer.

Joe Fairless: What’s the best ever way you like to give back?

Amir Baluch: I have a couple different ways to give back. One is actually through my book, “Make it, Keep it. New Wealth Strategies For Physicians.” It’s just kind of all the knowledge that I have just on the basics of investing in general, and there’s definitely a lot of good real estate chapters in there. I just roll it all up and just almost give it away for free. You can get it on Kindle for 99 cents. I think that will make my physician friends tens of thousands of dollars in better decisions.

We also give back by training other real estate investors. We never charge for our time, we’re just happy to see other people join along, and as they grow, we might become partners. If they don’t grow, hey, they might be able to feed us deals, and we’re happy for them wherever they go in their career.

On the charity side, I’m the Sapphire sponsor of the Dallas Margarita Society and Dallas Children Charity. Every year we raise just over a million dollars in one night and we distribute it to about 70 children’s charities in the [unintelligible [00:25:37].06]. Joe, you were probably familiar with that when you were living down here.

Joe Fairless: Yeah. I haven’t been personally involved, but I’ve heard of it.

Amir Baluch: Yeah, those are the three biggest ways we like to give back.

Joe Fairless: What’s a mistake you’ve made on a particular deal that stands out?

Amir Baluch: Sometimes working with friends is not always a good idea, because when there’s money involved and things like that… There was a deal where one of my friends wanted to do a fix and flip and he needed a hard money lender, so I lent him the money… I said, “Okay, you’re coming in at a good enough basis, I know I’m not gonna lose”, but I was really hoping for a pretty good return. We start putting some terms in there where he loses all the equity in the deal after working months and months, and you get all your money back plus a little bit. They might not like that that much, although that was the terms that he agreed to… So I try not to really get involved with friends that much as business partners. If they wanna passively invest in my deals, that’s fine, but I kind of think twice about working with really good friends.

Joe Fairless: What happened with that deal?

Amir Baluch: We had to take over the project pretty much and steer it in a different direction, and upgrade it a little bit, get a new broker to sell it, and that’s pretty much it. But we should actually have a buyer in the next two days, so it will be okay.

Joe Fairless: Boy, a lot is happening within two weeks.

Amir Baluch: I know. There always something going on.

Joe Fairless: Where can the Best Ever listeners get in touch with you?

Amir Baluch: There’s a couple different ways… You can reach out to me at BaluchBulletin.com. I’m also on LinkedIn, if you look up Amir Baluch. A really good way is I’m gonna have a little special gift for all the listeners out there if you go to BaluchBulletin.com/eonfire; I have a special deal that they can download with tons of advice for anybody that’s doing anything real estate related. It will be a really good little addition to whatever knowledge base that your Best Ever listeners have.

Joe Fairless: Sounds like you were on Entrepreneur On Fire and you created that, huh?

Amir Baluch: [laughs] Yeah.

Joe Fairless: Sounds good. Well, Amir, I enjoyed our conversation, and hearing about the different ventures you have from the subdivision, the historic district Fort Worth, Texas where you bought 60 cents on the dollar because you’re just a likable guy and you had an inside connection with a person in the city. You are building, the lots cost 15k/piece, all in to build 85k, so you’re at 100k all in, and the sales price is expected to be about 140k. Then also the commercial deal with the 20 acres that you’re working on and haven’t closed yet, and trying to come up with the best approach for structuring that deal. And then the lessons learned along the way as far as finding ways to partner with people who know more than you and bring value to the table, because you’ll make less money on that particular transaction, but you’re more likely to make money and do it in a shorter amount of time, and then eventually you can branch off and stand on your own two feet.

Thanks so much for being on the show. I hope you have a best ever day, and we’ll talk to you soon.

Amir Baluch: Thanks for having me.

 

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