Founder Of RERX Capital Shares His Real Estate Story

Amish Munshi with RERX Capital to talk about his real estate fund. I've actually known Amish for a number of years now. He's been in the program for a while. He's an awesome guy. So Amish, welcome on today. How you doing, man?

Hey, thanks. And I was really privileged to be able to be part of IFS. I heard about all the details and decided to like figure out what's going on. And then I was like, this is a little bit more complicated than I can handle. Then I said, how do I make this easier? Because I got introduced to IFS. I said, okay, this is awesome. Let me make sense out of this. And then without all the training, and it's amazing how IFS manages to put this in the right modules and something that we can actually execute. And now when I look back, I'm like, it's not that complicated. And I think the secret is the IFS magic.

Hey, well, thanks, man. I appreciate that. You know, we put a lot of time in. I mean, we have hundreds of videos, right? To, you know, first you gotta get educated. educated before you can take action. But it's not about us today, it's about you. I want to hear about your story. I want to hear about, you know, your transition as you got into the fund world. But, you know, why don't you— why don't we just start with your background? Tell us, you know, how you got to where you are today.

Sure. So, uh, a little bit about my prior life. I was, uh, in a technology field, uh, doing complex technology-related, uh, security implementations. I was involved in some of the largest projects implementing security for Obamacare, implementing security for the state of California in 2008 during the highest unemployment rates. People would go on the site and like bang it, like try to take it down, and we were holding the fort with minimum resources and crazy expectations from everyone. So yes, so that was my prior life. Then I kept doing the same technology work for about 20 years, and I was going to make a change within technology. How about doing something that I really like to do? I did my analysis and I said, there are 2 things that I really like to do. I like to work with fancy cars. Automobiles was always my interesting passion, and I said, if I try to do that, uh, with the skills I have, I think I'm just going to lose money and it's not going to be a career. So I selected my second best option, which I'm really passionate about equally. And I said, how— I, I looked at some of my history and, uh, how, uh, I have made money, how— what has made me successful, uh, financially. I have done some, uh, some equity investments in stocks It did work for me, but then I think it needs a different mindset, and that was not for me. But then the important thing that did work for me consistently over even if I look at what my parents used to do was real estate and financing. So I said that that is something that makes sense. I'm good at it. I have proven that it can work for me. So I started in 2018-2019 timeframe. I started investing in real estate. As a full-time profession.

And you just started, you know, taking down deals yourself, right? With your own capital?

Yeah. Yeah, I did. I got lucky. There were, there were some things that I think I had a benefit. I had my wife who is, who was able to manage the home and the finances portion of running that. So it allowed me to take the risk of quitting what I was doing and doing this full-time. I also had made some money in real estate, which allowed me to use that and launch the career.

Yeah.

And coming from a lot of financial education, I had my MBA from Rutgers in global business. I backed that up with another degree from MIT in structural engineering and more on architecture and planning for commercial real estate. On how, when I say structural engineering, it's like financial engineering, right? Not like physical things. on how commercial real estate, how complex large buildings are done, and how that financing is done. So it gave me a lot of background on, uh, how hopefully someday the large scale will, will, will work out. And then I realized if I go that specialized, I might be doing one building in my life, right? One, uh, one tower. And I was like, yeah, uh, what are the chances of succeeding?

It's like 10%.

So I said, okay, let's, let's see where, where do I really fit in? What are my strengths? What are my weaknesses? I did an internal SWOT analysis of myself and I said, we have to be able to have some volume to have some success. And then I said, I think I like semi-commercial investments. I did a lot of training. I'm part of multiple groups that helped me with the specialization within real estate.

Yeah.

And I finally created a strategy myself that works for me in the market where I am.

Well, that's awesome. I mean, first of all, congrats. Like, that's a big step for a lot of people, right? Transitioning out of their career that they've been in for a few decades, and, you know, they've mastered one craft, and to, you know, pursue to get away from that 9 to 5 and pursue honestly more of an entrepreneurial investor route, right? It takes a lot, uh, you know, to take that step and congrats. And, uh, you know, obviously you've been successful. So yeah, let's talk a little bit more about, you know, the actual type of deals that you do. I mean, geographically, what's your concentration? Uh, you know, just give us, uh, give us some, uh, tips and tricks from REX Capital about how you guys think about real estate investing.

Yeah, so I started off more on the equity investments, uh, which is on within the semi-commercial. So during the pandemic, the there was super high growth in the valuation of the properties, right? So it was easy to own a property, and if you hold it for long enough, you are, you're probably going to make money. It was pretty simple calculation. But at that same time, how do we ensure we don't lose money? So we— I, I did a deep analysis and saw the 2 main risks in real estate is if you have bad tenants or you are forced to sell the property at the wrong time. Those were 2 main risks. So how do we overcome this? And I like the residential market a little more than commercial because in terms of actual asset, because there is a lot more severe shortage of residential properties than commercial properties. And then within commercial, obviously there's retail and everything else, but multifamily was super competitive. Residential, there is an inherent shortage of homes. And then finally, if we look at anyone, anyone that rents in a multifamily would always— not always, but majority of the time, they would love to be in a single-family home. So there is always going to be a demand for single-family homes.

Mm-hmm.

So I selected single-family as the asset, and then I saw what are the disadvantages of it. One of them is you have one tenant and you are exposed to the market dynamics, right? The— I like the commercial aspect where the property valuation is based on the income on the commercial side. So I took all of those commercial benefits and I applied them to residential real estate. So that's where I came up with semi-commercial investments. So my actual assets are residential, but I generate commercial incomes from them. I have multiple tenants and I don't have long-term tenants. I prefer shorter-term tenants that pay me a premium for, for their stay. So the 3 asset classes that I invest in is assisted living, short-term rentals, and student housing within, within residential.

Gotcha. That's awesome. Quite the little— quite the mix there. Um, you know, so you, you started off, you started just taking down these deals by yourself with your own money, right? And then you started syndicating a few deals, you know, by, you know, raising investor capital, you know, to move a little quicker. And now ultimately, you recently launched your fund to, you know, scale this business even quicker. Can you talk us through a little bit your kind of thought process of, uh, you know, the, you know, the development of that story and why ultimately you decided, you know, to, to use the fund vehicle to, you know, uh, pursue and optimize your real estate business?

Sure. So even, even when I got introduced to IFS, I've done like 2 syndications even after knowing IFS and knowing everything that I could do with the fund. I think there is some merits on doing a syndication sometimes versus doing a fund. A fund has to be structured and repetitive. If it doesn't quite fit the same guidelines, but if you have a good deal, just keep it outside the fund. Nothing is stopping you from doing that. But the fund should be repeatable, should be— it's like developing a system, right? So you've got to have your own guidelines and it needs to fit that guideline so that it's repetitive and we can analyze the performance of of a fund. So I did launch the fund very recently. So we are initially— we are still at pretty initial stages, but it's just a different structure. It took me a few years to do the fund for myself, mainly because of my own inherent maybe over-analysis that I generally do. I know I've had meetings with you, multiple meetings, saying real estate is generally a closed-ended fund. And I was like, I don't want to sell my real estate at a specific time. I'll sell it when I want to. So I wanted an open-ended fund. And that, generally most real estate funds are closed-ended. So that was a challenge that I pushed myself and I kept pushing and pushing, saying, I want an open-ended real estate fund. How do we make it work? And I finally managed to work with Avester and set up the funds with them, which does provide us an open-ended fund. And it's, it's, it's a— it worked out really well in our case because of the way Avesta is structured. So we can have individual deals that we can look at, and at the same time, it's still a fund.

Yeah, no, that's great. No, and, you know, everyone finds their own journey and their own time. And, you know, I think you bring up a good point though. Like, you know, everyone— there's obviously the traditional way that funds work And that funds are typically structured, but everything ultimately goes back to your LP base, right? Like, it's an alignment of your capital with your capacity.

Right.

And if you have LPs that want a certain structure or like a certain deal type or, you know, have, you know, aptitude for something like that, great. You know, like, then by all means. So, I wanna ask you, you know, a couple questions. There's some people on this call that obviously, you know, are already running funds. Uh, there's some people that are just brand new. Um, you know, let's cater some conversation to someone just starting out. Like, what, what, what pieces of advice would Amish give to someone who's maybe thinking about starting a fund or just starting out? Like, what's something you wish you knew when you were just getting going?

Uh, I would say I think I was on the benefit, on the receiving end, uh, because I, I think the fund was probably the right structure for me. But there are a lot of people that might be wondering, like saying, let's do the fund and then figure out what to do with it, right? Versus you got to have, like, ask yourself, like, what are you good at doing? Are you doing something that's unique? And there will be a way to make the funds work for you rather than going into a fund and then figuring out what you're doing. So that is something that I have observed with a few people saying, let's create Let's identify your core competency and then do the fund. That is the first thing. And then secondly, definitely get the proper education, proper guidance. It's gonna be much cheaper to do the fund if you have the right direction and the right guidance. That is invaluable. So that definitely helps. And what, in my case, I think I wish I would've done a— I would've started the fund much sooner. With all the resources and benefits and networks and help and assistance that I have now, I should have just done the fund a lot sooner. I don't know why I waited for so long. So don't overthink it. You have— with IFS, you have all the required guidance. There is a lot of content available even on YouTube that will help you understand and ensure that you are doing the right investment with IFS. And once, once you are working with IFS, there is— it's like reading a book. Like, you just go through the chapters. You don't even have to decide which chapter to start. Read it like a novel and it's easy.

Yeah. Well, that's great. You know, like, I appreciate you sharing that. What are some habits that you feel like you've developed that have attributed to your success or your development? Or, you know, what are, what are some daily, weekly, monthly rituals or exercises that, you know, you do to, you know, stay sharp and, you know, stay on top of the industry?

Yeah, so within, within last 4 years, I've had 2 new kids. So whatever schedule I create, there is a modification to, to that schedule that does happen. But at the— at overall, I would say A few things that we do have to realize is develop systems. I think developing systems is the most important part. If you're able to do something that's repetitive, then hire somebody to do it and then focus on the next core thing. When you start a fund, it's just like starting a new business, right? Everything is your responsibility, which is fine. You can do everything initially for a little while and then you're going to get exhausted. So sooner or later, you should start having additional team members. Initially, be open to partnering with others, let— and define appropriate responsibilities. It took me a year to have the right partner. Unfortunately, Deanna couldn't join today, but she's— I've been super lucky to have her as my partner in the funds, and we have very, very specific goals and responsibilities within the funds.

So yeah.

Yeah, I, I saw my, my core competency where I'm good at, and she brings in additional competency. We still do have, uh, we're still open to having additional partners, uh, going forward, or, or, or an additional fund depending on, uh, uh, what capabilities we need. And, uh, uh, we can, we can add other people. So don't overthink it, don't delay stuff. Get started. You can always modify things a little bit as you go along.

Well, because, because you focus on, uh, you know, the more equity-type deals, and your partner focuses more on debt-structured vehicles, is that right? Yeah, I remember you telling me.

Yeah, that's, that, that's where the experience comes from. So I did a lot more of equity deals, she did a lot more on, on the debt deals. Yeah.

Well, that's awesome. That's great. You know, um, a lot of people when they're just starting out, you know, have these you know, trepidations about, you know, meeting new people and potentially partnering with new people, networking in general. Any tips, advice, you know, you'd share around that of ultimately you said you took your time and, you know, you know, finding the right partner for you. Like, you know, what advice would you share on that regard of identifying partners and building your networks that way?

Yeah. So I think it's almost like a marriage, right? There is no way to get rid of a partner once you have one. You can create a new fund. That's it. It's not as strict as a marriage, but yeah, you can always create a new fund and restart things. But it's almost like a marriage. So if it works out, it works out really well. The way to figure out what will work is the same thing as marriage. You have to be true to yourself. You have to realize what your strengths are, what your weaknesses are, what you like to do, and what you don't like to do. add the other people based on their capabilities and see if they are the right fit. Give it a trial run, maybe do a simple project first with them. Don't rush into a super long-term commitment with other people's money. You, it's a lot of responsibility when it is somebody else's money than it's your own money.

Yeah.

Keep good accounts and be honest. Keep, and the most important thing has been keeping the communication lines open with, with the investors, with the partners, with all the stakeholders, and then everyone kind of is aligned on what we are trying to do.

Yeah, no, that's great. Appreciate you sharing that. You know, it's so easy when you're seeking out new partnerships to be attracted to somebody that's like your own avatar, right? You know, that has the same exact skillset as you do, but really inherently that's a waste of a partnership, right? You need to identify partners that, Fill in the gaps. And I love what you said, you know, determine what roles you're going to do, determine what roles you need filled, and then, you know, start from there and go find someone that can fill that gap. So I think that's great. Well, well, tell me a little bit about the future plans for RERX Capital. I know you said you've got a couple of asset classes now. You operate in single-family, assisted living, and semi-commercial spaces. Uh, you know, what does the next 5, 10 years look like for, you know, REX, uh, RERX Capital?

Yeah, so our main— the main reason why I started doing this for others is, uh, I'm going back to the very first topic, sorry, uh, a little bit about myself. I did my own financial, uh, analysis with a financial advisor. Uh, for the first time, I actually paid the financial advisor to do the analysis. Generally, it's generally somebody that has— is going to get money by selling me a product. So I really got an honest answer from, from this person. And he told me I need $16 million to retire. I was like, how am I going to get there? And that's where I started doing my switching from technology job, which was a super high-paying job. My wife is a physician. We were really comfortable, but we were not going to get to $16 million comfortable assets within, within the timeframe of retirement that I wanted. So that's when I switched to real estate and said, okay, this is a vehicle that works for me. And then I had a great start in what I did. I almost reached 50% of my goal. I reached close to $7 million in my own funds, in my own equity savings within 2 years. And I said, okay, if I can do this, everyone else around me is actually in that same boat. So how do we manage to do this for others? So that's where I decided to call it RERX, which stands for Real Estate Prescription. So it's like a financial prescription using real estate. How do you build wealth and get out of a hamster wheel of constantly doing a job and helping— they are high net worth people having high income, but still not having enough savings. And the inflation killed it, right? Now they need— if I go back to my same financial advisor, he might say I need $20 million now to retire. But, uh, so I— the goal for RERX is helping other high net worth people who might be stuck in this hamster wheel to get them to real financial freedom. So yeah, I, uh, once, once they are, uh, on their path to reach where they need to reach, uh, I will be seeking out more people. So in terms of goals for RERX for the 5 to 10 years, I want to at least help 100 other individuals to get out of this constant hamster wheel of— even if they have high income, the problem becomes high income means you have a set of quality of life which is even more difficult to survive without the income. So there is a need to reach higher net worth with higher equity and savings. And with the inflation going crazy, it's just pushing everything even higher.

Oh yeah.

So the goal is to be able to help 100 other families reach a stage in financial success where they are not dependent and they have enough to take care of themselves and at least some, some, some shape or form of taking care of their kids.

Hey, that's awesome, man. I love that. I think that's a great mission. Well, that's it. That's great. Well, Amish, thank you so much for, for taking time to hop on this call with us today. today and share some of your insights. You know, people want to, you know, connect with you or learn more about, uh, RERX Capital. Where is, uh, where's the best place that they can reach you at? Sure.

So the place— there are obviously 2 aspects to it, right? Uh, other investors can reach out to me at rerxfunds.com, and the place where we deploy capital also has a lot of, uh, benefits of community where People can request investments from us, and that's RERXcapital.com.

Okay, perfect. Well, Amish, thank you so much. Appreciate you hopping on today.

Thanks, thanks, Lincoln. Have a good day.

Well, yeah.