57: Klosed with Steve Kachanian

Welcome. This is Real Estate Investing Live from New York with James Nelson, the principal and head of Avis and Young's Tri State investment sales Group. In this program, you'll learn about the world of commercial real estate and find out why it is one of the largest investment opportunities in New York and around the world. Now here is your host, James Nelson.

Welcome to show number 57 of real estate Investing Live from New York. This is your host, James Nelson. Thank you so much for joining us once again on the Voice America network. And to all of you who are downloading this on iTunes, Spotify, iheartradio.com wherever you are getting your podcasts, I really, really appreciate your support and sharing this with your friends, your ratings, your comments. We're just, we're on a roll here. And the point of this show is to te how to invest in commercial real estate. But so much more than that, really what it takes to build a business. What are the lessons learned to help you succeed in any market? And that's really the topic of this book that I've been working on, which is going to include some of the interviews from some of the legends in the business. So keep a lookout for that next year. We'll be really excited to roll that out. So for today's show, have a great interview for you with Stephen Kashanian and Adam Hedgeby from Closed Properties. That's closed with a K. And this duo, well, it's their whole team. They're unbelievable. They are so active out in the market. They told me They've contracted on 14 properties since March. I don't think there's hardly any other buyers who can make that statement in New York. And they just do such a great job staying front and center. And I certainly have benefited and try to run our brokerage team the same way, being front and center with the digital marketing. And really, I think for you investors out there who are already out looking to buy properties, getting your name out there and being top of mind when that broker has that great deal, I think that's really something for you to think about. So I think you're gonna get a lot out of this interview. Stephen came to the US in 2007 from Milan having never done anything with real estate. He told me back in the day he was waiting tables, but wow, what an incredible business that he's built here. And Adam Hajibai, who heads up his acquisitions, is gonna teach you how to go out and source great deals out there. So we're going to take a brief word from our sponsor and we'll be right back. When it comes to business, you'll find the experts here Voice America Business Network.

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When it comes to business, you'll find the experts here Voice America Business Network. And now it's time for our investor spotlight. And yes, with us is Stephen Kashanian and Adam Hajibai of Closed Properties. So grateful to have you both here. Usually we just have one investor, but here we've got both of you and wow, what an incredible team. They're some of the most active dealmakers in the city. We've had the pleasure of transacting with them over the years. And Stephen and I have also had the pleasure while out in Vegas at ICSE having a little fun out on the racetrack, driving some cars. So great to see you all.

Thank you. Thank you.

Thanks for having us.

Perfect. So Stephen, maybe you can give us a little history on Closed Properties. Tell us, when did you start this? What was the impetus? And then maybe tell us a little bit more about what the company does.

So I moved from Italy in 2002 for college. Out of college, I started working with my grandfather. At the time he was buying foreclosure homes in the boroughs. I worked with him a couple of years. I didn't really love it. I went on my own. In 2007, I opened up Closed Properties and I started as a brokerage. I had a couple of high net worth friends and family that I knew, I knew were active in the real estate business. So I was focusing on finding them opportunities until in 2013, I found a retail condo in Manhattan and I went to my top buyer at the time. I'm like, listen, if you want the property, I'm coming in as a partner. I'm not selling you the asset. Thank God we did very, very well with that asset. We found a Tenant, we refinanced it. With that money, we bought a second building and it just snowballed from there today. Thank God. We are vertically integrated. We have a strong acquisition team. We have an asset management firm in house, we do a construction management in house and we take care of deals from Shubtownach or within the infrastructure. We built a niche and an expertise for hairy and complicated assets. Sub $10 million. And we are driven primarily by volume and because of the expertise that we built through the years of handling these more complicated situations, maybe assets that have significant amount of violations, structural problems, tenancy issues, we reposition them and put them into a portfolio.

Fantastic. I definitely am excited to get into the details and you really have built a machine. And I love how I always get those weekly email updates from you all. You're in contract on 12 properties. You've closed another 20 to date. And you guys are just an incredible volume shop and I think an inspiration to a lot of people looking to get into this. So you know, Steven, did you. How did you originally, I guess pick brokerage? I guess you said your family had some experience with it, but did you know when you went to college and came to the US that real estate was in your future?

No, absolutely not. Actually interviewed over a summer for a small broker at the time and I got my feet, went into the business. I fell in love with the transactional nature of it. And very quickly I realized that this is something I wanted to devote my life and career to. I didn't really have any backing or any real capital. So the easier way of getting into the business and making some money was through the brokerage angle. And I really spent the first three, four years focusing primarily on four buyers that I had who gave me their wish list and I would scout the market, find them opportunities and get paid by them.

So Adam, did you start your career as a broker or how did you get into the business?

So I actually started by actually I was in the jewelry business and I knew Stephen at the time and the jewelry business wasn't really, you know, my cup of tea. So I asked Steven, you know, while I was in my senior year of college, asked him, you know, if there's any opportunities and for me to work with him. And he actually told me, yeah, there's a management position, you know, it's an interim position and you know, you get great experience. So I actually started. I got my feet wet in the business by doing management and leasing for close and that kind of trickled into getting more involved in the acquisition. Side, which I've been doing for the past three or four years. So that's how I got started.

You can imagine that's fantastic experience for ownership to kind of get a feel for the management, but also for the leasing to be on the front line. Because I've got to figure when you're underwriting properties today, you know, you've been out there before, you know, trying to rent this space, trying to run it, and you know, what it really takes to run a property. I think, you know, it's great advice to our listeners because, you know, as much as we try to put reliable information on a broker's flyer, you know, these are most of the time projections, and you really have to vet it, and you really have to know what's out there. I mean, especially with retail today. I mean, with everything going on in the world, to understand if you've got vacant retail, you know, how are you going to pro forma that rent? How long is it going to take you to get that tenant in there, what type of concessions you're going to have to pay? So I think that's really tremendous experience. So, Steven, you said when you made the transition from broker to principal, so you found a great deal, another deal to another deal. I mean, at what point did you start to wind down the brokerage, or do you still do a little brokerage on the side?

After our second acquisition, I said to myself, let's just focus and devote ourselves solely to the acquisition side and build an infrastructure that would allow us to reposition these assets. So in reality, we haven't been brokering deals since, and our focus, as I was saying, has been primarily sourcing more opportunities and building an infrastructure that allows us to reposition these problematic assets. You know, one thing that I bring up very often during our team meetings to my team is, you know, I can give you the keys to the Empire State Building for free. I'll give you the asset for free. But if you don't know what you're doing with the asset within a week, you're under. So we've been investing a significant amount of resources and time and energy to rehabilitate very strong infrastructure. And today we have over 30 people working within Closed and Bluesky Group, which is our asset management arm.

Yeah, I mean, you really have to build teams and systems, and that is such a reoccurring theme. And as I talk to some of the other legends in the business and talking about how they were able to scale, and it's about having those systems in place and being Able to scale and the right people. So no doubt, based on your track record and your success, you've got the right people on board and the right systems. So, Stephen, I would love to hear if you can share a little bit more about that first deal, because a lot of the listeners to the show, you, you know, maybe they're a real estate broker, maybe they're an architect, they're looking to take the plunge, they're looking to do the first deal. So you found a great opportunity. So it starts with a great deal. So I don't know if you source that off market or what made it such a great deal, but maybe you could tell us a little bit about that. And then when you brought it to one of your clients and you proposed to be partners, how did that work? Did you each. Were each of you going to put in half the money or, you know, how did that work and how did. How are you going to divide up the winnings?

So there was a turning point in my career. I found this deal that is being marketed by Mass Sineko, Michael de Chasser, an old friend of yours.

Hopefully he's listening and if not, I'll tell him he has to.

Great guy. It was a vacant bar at 302 Broome street fully built at Bar 2000 at grade 2000 below level. They used to be called the happy ending. So the seller was the operator of the bar. He had some family issues. He wanted to move to Florida. He was asking over $3 million at the time. I thought that the value was there. You know, to have a fully built out bar in a good location, you should be able to bring in a certain amount of rent. And when I saw this space, I fell in love with it. And we negotiated it.

It was a little hotspot too. I mean, I guess that the name was kind of, you know, a little tongue in cheek. But like this was a legitimate lounge. I mean, this was kind of like one of the hotspots downtown. So surprised that he would just pack up his bags and leave. But I guess your opportunity to take over.

We got very lucky. We bought the asset for $1.8 million. I was projecting $15,000 a month in rent. And the reality is that when you're doing your first deals with, you really cannot afford to make any mistakes whatsoever. So I remember in one day I showed the space to seven different leasing brokers at an hour interval because I couldn't rely on one opinion and make such a mistake, especially on my first acquisition. So I really had to cross all My T's and dot my I's to make sure that we're on point. We were underwriting at $15,000 a month. It was a projected 7 cap. We got really lucky. We ended up renting the space for $20,000, turned the asset into close to a nine and a half cap. We refinanced it very quickly, and that really gave me the confidence but also the liquidity to roll my money to a second deal. We still own 3 or 2 Broome street today. But that was one of the key moments in my career that really allowed me to make a transition into ownership. And you asked me about how I structured my first acquisition. It was very simple. I went to my client. I'm like, this is the property. This is the rent that I think we're going to be able to get. I want to get my commission and roll it in. So I came into the ownership, overall ownership, for 5%. I couldn't afford to buy in more equity at a time. For me, at the time was a very big knot. So I started with a 5% position in that retail condo. I ran everything from soup to nuts. The leasing, the negotiations, the work that we're supposed to do for the tenant, the relationship with the tenant throughout, I worked in the refi. So my partner got a lot of bang for his buck. And that was an amazing opportunity for me to finally make a lifetime transition.

Wow.

That, you know, for everyone listening, I mean, to get into this deal. And that's what you call sweat equity, right? So if you don't have the money to put into a deal, you add value. You brought an incredible opportunity. You know, you brokered it. You used the credit from that as your contribution. And, you know, what you got out of that deal, I'm sure, was so much more than the economics. It was the expense experience. And like you said, I mean, that was really kind of the starting point where once you were able to refinance out and get some real equity, then you could roll that into your future. So you stuck with retail for a while. And, Adam, maybe you could speak a little bit about not only retail, but also multifamily, because I know having spoken to you all over the last year or two, you really, I don't want to say pivoted, but you're very focused now in the boroughs. You're doing a lot of volume with some of these smaller Maltese. But how long? Originally, it really seemed your firm was very retail focused, and now I would say you're really more multifamily focused. I'm sure you all think about what your focus is. And was that the transition and the history of the firm starting retail and now multi, Is that fair to say?

Yeah, yeah. We originally started out buying, you know, Netley Steel's strip center, the shopping centers out of New York State. And then we trickled down into buying retail condos in good parts of Manhattan, you know, in the East Village and downtown in the financial district. And then as retail was kind of getting kind of shaky, the market, we started shifting our focus more so into multifamily and in good neighborhoods. In Brooklyn over the past few years, we've been deploying a lot of capital in the Bronx and upper Manhattan. We just bought a few buildings in Queens. So I would say we are still tackling retail, especially in the boroughs, but we've shifted our focus more so to multifamily mixed use assets and good pockets of the boroughs over the past, I'd say 24 to 36 months.

Perfect. So, Adam, I think it'd be super helpful for everyone to hear how you all source opportunities, because as Steven said, it started with a deal, right? So I gotta imagine that you all have an enormous pipeline, right? Because it's not like you're buying every deal you see. I mean, can you give us a sense, first of all, how do you go find the opportunities, how big is your pipeline at any given point? And then how many of those initial properties of interest end up to closed properties?

So that's a great question.

So don't give them too much of our secret sauce, please.

So honestly, the bulk of our majority of our business is just relationship driven. You know, whether it's people that we've spoken to, being in touch over the past few years, whether it's meeting them in their offices for coffee or, you know, through email, through our email campaigns, you know, large variety, large chunk of our deals have been through broker relationships, people that we've been in touch with. And it's not always the first time that we get them, that we hit the deal on the first shot. There's always this concept, which I'm sure you can attest to, is always following up. We're always engaging in deals that we like. The location, the price isn't too bad, you know, if we own something in the area. So, I mean, our network of brokers and relationships, it's majority relationship driven. We take pride in how we communicate with our network, our honesty, our transparency. And I think our brokers and clients appreciate that. And at the end of the day, after you've shown the market that you've transacted, you're active and you're seriously buying, then people trust you more.

I know that. And if I'm not mistaken, Adam, you focus on the off market opportunities and speaking also directly with owners. And then Jacob Namdar heads up more of the broker relations, is that right?

So Jacob and I actually work as a team. We're dealing all day on the market. We do have one guy in our office that does direct canvas owners in upper Manhattan in the Bronx, and one guy in our office that does direct canvas to owners in Brooklyn. And we have a system in place that it kind of prevents overlapping on, you know, deals. So we have structure in place. But Jacob and I work as a team that we deal with brokers and deals on the market all day.

So, Adam or Steven, you know, I'd love to hear about your outreach to brokers because look, I'm a broker, my job is, you know, reaching out, making calls. I've called both of you a bunch of times. You know, hey, I've got an opportunity. Take a look at this. I mean, that's what we do as brokers. We've got a job to go sell properties to stay with constant outreach. Just to make the observation, there's very few buyers who are actually calling me on a routine basis. And you all are one of the exceptions to that. Not only are you reaching out to brokers on a regular basis, but you have a very consistent marketing outreach. Because, look, every single time you send out a release saying, hey, we just bought another property and I don't know how big your list is. And Steven, you don't have to give away all your trade secrets, but I gotta imagine I'm not the only broker getting that email. It's saying, closed properties is open for business you're transacting. If you got an opportunity, call us. And so I think that's really effective. So Adam or Steven, is it kind of a conscientious thing where you're reaching out to brokers on a regular basis? And if so, what are you talking to them about and how do those conversations go?

Being a small firm and being that New York especially is extremely competitive, very early in the game, we had to make a determination how are we going to differentiate ourselves from the bigger boys? And we made some strategic decisions. One of them was picking a specific segment as far as dollar size. Another one was picking up a specific type of assets, the more complicated ones. But also as far as our marketing and our message at the end of the day a broker that is marketing an asset really cares. I think about two things. A is working with people they can trust because at the end of the day, they have a limited amount of time and effort they can allocate to a specific asset. So building that rapport and trust is very, very critical. And the second, to deal with a buyer that actually pulls the trigger and shows up at the closing table and signs the check. So our marketing effort is catered to this. I know that we are more on the aggressive side, but it's done design because we want to reinforce or reinforce and reassure people that we. Even in the middle of the pandemic. For example, since April, we signed 13 different acquisitions. Now, these were smaller acquisitions, but the total aggregate value is over $30 million. The point I'm trying to make is that in any market there are opportunities. And we want to make sure that the brokerage community, the lenders and the partners understand what we're buying, how we're buy, where we're buying. So they were in constant contact. And the more they see the volume of deals that we're closing, the more our credibility as buyer grows. Because you cannot fake a closing, you cannot fake a post. At the end of the day, you have to close an asset in order to be able to advertise it.

Everything you're saying makes so much sense. And just to keep those lines of communication open, it's not just the brokers, but the lenders and that whole whole network. But I'm also still. And hopefully our audience realizes. So you said since March or year to date, how many transactions have you closed and how many do you have in contract? What was the number again?

So since April alone, since COVID hit, we signed 14 separate acquisitions, out of which we closed on nine already. Yeah, since April.

I don't think that there's one buyer in New York City who can say that they've signed more contracts than you have since April. I mean, it's. Again, I mean, some investors are doing larger transactions in one shot, but that volume, because I've got to imagine even to do a $2 or $3 million deal is probably as much work as a $30 million deal. You still have to go in and do the diligence and make sure the lease is checkout and all that. So, I mean, it's a real compliment to what you're doing. But I mean, I gotta ask. I mean, these are really scary times. A lot of investors have been sitting on the sidelines. Maybe they're waiting because they figure that Pricing is going to drop further. I mean, what gave you the confidence to jump in and do sign 14 contracts since April?

I believe from my very core that all the years before COVID all the negotiations, all the underwriting, all the deals that we lost, all the mistakes that we made were to prepare us for this. This doesn't mean that I am delusional and I don't understand the risks and the problems that they were facing. But at the end of the day, real estate is a long term game. And the way I look at it is that in phases, right, there is probably going to be a lot of pain in the short to midterm, midterm to long term. I'm still a strong believer in New York, regardless of the politics of it. We are becoming more and more of a tech hub and these are thousands of people being employed in New York with high paying jobs. And there is a lot going in our advantage. I believe in the long term, the short term is going to be very, very painful. But I think about it all the time. I have a lot of my grandfather's friends, men, they're in their 70s, 80s, they walk in Manhattan, they're like, Steven, you see this 100,000 square foot building, I could have bought it for $2 million in the 70s. Now it's not as dramatic now as it was then, but I think that it's a good comparison because ultimately the types of assets that we're buying right now are significantly better located than the types of assets we're buying. Three years ago we just signed a hard contract on an amazing mixed use piece on Bedford Avenue where they were asking $11 million pre Covid. When you're buying at more than 50% discount in a prime, prime, prime, prime location, yes, there's going to be pain, but eventually the world will turn around and wake up and things will go back. So it's very important for the people that are listening to us that whenever you're making an acquisition, you want to make sure that you're 120% transparent with your partners and your lenders with what the threats, what the problems are. If you have a solution for your problems that's going to help you take the deal to the finishing line. And you have to make sure that you're aligned as far as expectations, right? To go to a lender and tell them you're going to take him out on a loan that you're closing on in six months, it's not very likely. So as long as you're going in at a Low base. We really make our money on the buy. And as long as our acquisition basis is low, thank God we have the wherewithal of repositioning the kind of assets. We have incredible banking relationships and we have very, very loyal partners that have been with us for a long time that, thank God, have the capability of withstanding for a while till things start turning around.

No doubt there's tremendous opportunities now, but you got to take that long term view. So when you go to your investors today, do you tell them, look, the business plan is. A typical business plan would be five to seven years, reposition it, then resell, refinance. I mean, what are you telling your investors today?

Every time I share an acquisition with my partners, I start with the laundry list of problems. And we tend to overemphasize on the problems so that we can set the expectations correctly. If There is a 10% likelihood of a bad event happening, we share with them very, very clearly so that there is no misunderstanding. But also through time, through experience, there are very few problems that cannot be resolved. So for every problem, there is a solution. And this is really what we do. We're a solution driven firm. We're as flexible and creative as they come. Thank God our partners have been very loyal to us and they give us the bandwidth to do what we do. And the fact that we are running all the asset management and all the construction in house gives us a tremendous advantage because we're able to run projects faster, cheaper than other people, and time is money in our business.

You said so many good things there. Just writing it down, I mean, it really, the transparency, look, there's issues, there's always problems. And I've always been a huge proponent, especially when we're selling properties. Tell everyone the good, the bad, the ugly up front, right, because they're likely gonna find out anyways. And you rather just get over that if there's a roadblock. And look, it might not be for all investors, right, but they know what they're getting into and that's how you do repeat business. Because when things come up, it's not a surprise. So that's really helpful. Adam, talking to sellers today, the brokers in this new environment, I gotta imagine it's been a little easier to transact. I mean, when you're in a really hot market where prices have been going up, you find yourself, I'm sure, getting into a lot of bidding wars. Sellers who say you think you have a deal and then they raise their price again, do you really feel more like it's a buyer's market.

Now, I do believe it's more of a buyer's market right now rather than a seller's market. I always tell this to the brokers and whoever I speak to, I said right now as opposed to how it was maybe two or three years ago. If a seller wants to market his building, he really has to have a real reason or motivation behind that. You know, if yes, they have a story, you know, for example, for the deals that we've signed since COVID each one of those properties or deals had a certain motivation or story behind it. Whether it's partnership dispute or long term ownership that just wants to move to out of state or whatever it may be. Every, every seller right now has to have a motivation or story behind it to meet the market. In terms of is it easier right now? I mean, I think there's less competition out there, as I'm sure you can attest to it. I mean, a lot of buyers are just on the sidelines right now. So in terms of getting into competitive bidding wars, it's not as much as it was used to be, but it's still very tough right now just because every deal just has its layers of issues, taking the deal from the beginning to the finishing line. So it is a buyer's market, I believe. But I still think there's still that gap between sellers, expectations and what makes sense for the buyers. But as Steven mentioned, I think things will turn around and we'll be able to bridge the gap even further.

Yeah, I'm glad you brought up the seller's motivation. I mean, you'd be surprised how rarely an investor asked me, james, why is this person selling? And it's, for me, it's the number one question is what is the seller's motivation? Why are they looking to do something? And look, in a hot market, it might be, hey, if they can get a certain price, then why not? But today, to your point, someone who's selling into this has to have a real reason, whether they're taking chips off the table, whether trying to put fires out elsewhere, or maybe they're selling a smaller asset. And sure, they're gonna sell at a lower price than they would have a year ago, but when they go to buy something larger, they'll get an even bigger discount. But I think it's always helpful to know what is the seller's situation, because that can also help you answer any of the challenges or hesitations they have. And I really like what Steven had to say about being, you know, solutions oriented. So I love to spend a little bit of time just on how you built up your organization. So, Stephen, you started as a small brokerage shop. Now you got 30 people. You're fully integrated. You know, I'm sure when you started out, maybe you'll tell me that you were still doing everything in house managing, leasing, you know, construction. But what was kind of, you know, I'm sure at some point you were at a crossroads where you either had to, you know, massively scale up your operation or outsource more to the third party. So what. What, you know, what prompted you to grow out your operation and become vertically integrated? And what does that really mean? What do you all do from start to finish?

It was a slow transition. I believe in doing things gradually and building strong foundations. Adam alluded to this earlier. I just wanted to pinpoint that we started with retail at first because it was the easiest asset class to manage. If you're buying a triple net, McDonald's in Wyoming, there is really not much to do. If you're buying a retail condo in Manhattan, once it's occupied, you put it away. So as we've gotten more confidence and more knowledge and more capital, we started getting into more complicated assets. We started getting more involved with construction. But I knew from the very beginning that it makes a tremendous difference whenever you are managing your own portfolio. Because I will spend $75 replacing a sink that the manager that is on a salary, we probably spend $150, $200. Now, this is not a lot of money, but if it happens two or three thousand times a year, it can turn into a lot of money. So we've put in a significant emphasis in building an infrastructure. As we're growing Today, we have six people running in the acquisitions department. We have over 20 people in management. Anything from bookkeeping, collections, legal payables, receivables, tenant relations, maintenance, then it opens up to the supers, and then under them you have the porters. So it's a very, very tight organization with very defined job descriptions and roles and responsibilities. And this is something that early on, a lot of it was falling onto me. But as we grew the portfolio, we had to bring in the right people to help us grow organically. I'll tell you, asset management is a money pit. This is something that if you're doing it correctly, you're doing it properly. The second you're scaling up a little bit, you're going to need more people to help you manage. But ultimately, when you're preserving tens of millions of dollars of valuations, on a portfolio. It's probably one of the best investments you can make. Now, regarding the construction, we soon realized we're doing a significant amount of volume of renovations and what we're doing, we're hiring contractors. They were charging us an arm and a leg and doing a crappy job. So we started working closer with subs. I brought in a couple of people whose sole job is running our construction. And today alone we have five different projects, different buildings, different boroughs. Some are as small as three apartments and the bigger one, right now it's a three family that we're turning into 12 family in Belmont and anything in between. So I'm a firm believer in building a strong infrastructure, have the right people in place because that's what's going to allow you really to grow organically. Because if you're making a mistake, that mistake can end up costing you significantly more.

I really appreciate your sharing that and it's easier said than done. And for our listeners who maybe they've got a partner, maybe they've got a couple properties under their belt and they're at a crossroads and saying, hey, are we going to really scale this thing and do volume or not? But I got to imagine with 30 people, 30 salaries, I mean that's, you know, that's a lot of cost. And so, you know, as you grow, and you said you grew very carefully. But I've got to assume that whatever, you know, asset management fees that you have or acquisition fees, is that what's fueling the salaries? Because again, for those listening who don't, you know, who have a partnership, they haven't hired anyone, like maybe a full time acquisitions person, at what point do you feel confident enough about the money that the company's bringing in to start committing to those salaries?

Listen, this is a very delicate point. The growing pains that we went through, I don't wish it through my worst enemy, because as you said, whenever you have to make a decision, bringing in more people and having more responsibilities and mouth to feed, it's a very serious responsibility. Ultimately though, I made a determination that this is my life career, God willing, unless something happens. And if you want to build a career in this field touching complicated assets, you have no choice but to align yourself with people that have your same vision, mentality, tolerance to pain and desire to grow and do good things. But it's not easy. It's really not easy. The management fees that we bring in, they are not enough to cover all the overhead. And the way that I'm able to sustain it is because of the value that we create overall within the portfolio. You know, thank God. I think not. I think. I know we're over 95% on our collections, which in New York on smaller buildings is really, really good. But that didn't just happen. This is because we have the right people in place. We have the right structure and processes. Right. When Covid hit immediately, we reached out to our tenants in a very human, proper way, let them know they were there for them if they needed any kind of assistance. So we really try to do the right thing by our tenants, by our people. And I really believe that in the long run it pays up tremendously more.

I really appreciate your sharing that and the openness because I know that's going to be super helpful for our listeners as they think about investing in their business and their team. And I, I feel exactly the same way as you do that it's really about the people in this business. And if we were just on our own individually, we could only accomplish a fraction of what we do. So, Adam, maybe you could talk a little bit about what attracted you to closed properties. And you got 30 people there. What is the synergy like because it's such a big piece of your success? So, so, you know, how are you interacting with people throughout the day? What's it like?

I mean, we have a nice crowd in our office. I mean, I'm primarily engaging more so with the acquisitions guys, just, you know, going over deals, making sure, you know, our underwriting is on point. You know, we all kind of cross check each other to make sure, you know, if I'm underwriting this deal, make sure you have another pair of eyes to make sure I'm not missing anything. And I look at someone else's deal just to kind of, you know, collaborate and work more so as a team. But I mean, we have a great, great crew, you know, hardworking guys, and I think we have a good camaraderie and we work more so as a team. And I think it's really important since, you know, a lot of people, you know, they work part of companies with a bunch of people and it's very key. It's a huge heat of work, you know, collectively as a team, because it just makes, it benefits the entire company and makes you grow even more so, you know, the camaraderie and helping each other out is what we take our pride in as well.

Wonderful. Well, this has been such an incredible conversation and really, again, no surprise how successful you've been, you know, throughout this. And Stephen, with only A couple minutes left. Would love to hear what your advice would be to an aspiring investor, someone who's maybe thinking about getting into the business. Maybe they're a little nervous about with everything going on and when to jump in. What would your advice be to them?

I think that fear is healthy. It's a good thing because it keeps you in check. I think that especially the first transaction are really going to shape your career. Because if your first acquisitions are successful, they build your confidence, they help you understand better the life cycle of a deal. It helps your reputation with lenders and with partners. So I would cherry pick the first acquisitions very, very, very, very carefully. And as you grow, you make more acquisitions. It's really critical to have an infra behind you that allows you to keep growing. I am very, very proud of my team. We have a very open dialogue. We don't have an employer and employee kind of relationship. We all work as a team. And when you're leading a company, it's critical to really lead by example. I happen to be a maniac when it comes to work, so I'm in the office by 6, 6:15 in the morning and I don't leave till much later. But that's a. Because I love what I do. I'm fortunate enough that my family, my wife and kids are very supportive of it. But I wouldn't be able to tell my guys to work hard if I was sipping tequila on the beach all day. So if you're running a business, it's critical to really lead by example. Don't forget that people don't really forget when you do something wrong. They may nod, they may pretend. But doing the right thing, even if it's painful and difficult long term, pays dramatically. Now, we are dealing with a lot of money, and money unfortunately brings the worst in people. I give this example to my acquisition guys on a daily basis. I'm like, listen, you're here talking millions of dollars all day long, but put me $20,000 on the table right now. How fast can you get $20,000? It's a lot of money. We get desensitized by the money aspect because we treat them as if they were potato chips. So dealing with people with integrity, surrounding yourself with people that you can trust, that you can rely on, it's very, very, very important. And that's ultimately how you're going to be able to build a real relationship with your investors and with your lenders and with your team. It's a lot of work. But ultimately I believe that this is the best way of growing and scaling.

Well, Stephen, you definitely are a power of example and Adam, I'm sure you would agree and it's amazing to hear what both of you and your company has achieved. So just really appreciate your coming on the show today and sharing your story. I know our listeners are going to get a tremendous amount out of it.

Thank you so much for having us.

Thank you.

Thank you again. So this is your host, James Nelson of Real Estate Investing Live from New York.

A different approach to Putting our clients first Avis and Young's Tri State Investment Sales Group sells multifamily office, retail, development and specialty sales throughout the New York metro area. As experienced thought leaders in our industry, our 35 member group is available to help you make informed investment decisions by advising you on your current holdings or identifying new opportunities in the marketplace. Our one unified team is built on an industry unique platform which promotes unparalleled collaboration and teamwork. We share core values of hard work, integrity and expertise. We put our clients first providing tailor made strategies to achieve superior results. Please Visit us at aytristateinvestmentsales.com and follow us on Twitter LinkedIn and Instagram amesnelsonnyc to learn more.

Thank you for tuning in this week to Real Estate Investing live from New York. Please join your host James Nelson for another program next Tuesday at 7pm in New York, 4pm Pacific Time on the Voice America Business Channel. All shows are rebroadcast Wednesday mornings at 7:00am Eastern Time, 4:00pm Pacific Time, as well as always on demand. We'll talk again next week.

Sam.