Chapter 1: Introduction (0:00-0:38)
Marysol: Hello and welcome to the Un Billón Mindset Podcast where we think big and do big. So here, I've got Ahmed. He is a developer.
Ahmed: Yeah, good morning, how are you?
Marysol: I'm awesome. I'm here on vacation but love the fact that with wifi, everyone can be connected. So I'm over here in Mexico with a two hour difference but Ahmed is in Southern California, so that's awesome. Tell us a bit about who you are, what you do and what is the Ahmed of today up to?
Chapter 2: What Ahmed Does (0:40-3:02)
Ahmed: Well, first and foremost, I am not on vacation in Mexico but you are so I hope you're enjoying yourself and having a good time. My name is Ahmed Seirafi, I'm Southern California born and raised in east L.A. I am a Real Estate Investment Developer. I have been in the real estate business for over 20 years. I have gone from real estate broker, you know, commercial real estate broker to real estate construction manager, project manager, contractor and all the way through to investor and developer, where I now go and either buy property and own as cash flow or I go and buy land and develop that land in order to develop for a product for sale or product for lease and continue to cash flow off of that. So a little bit of both - a little bit of investment, a little bit of development work as well.
Marysol: So do you typically hold or sell your investments?
Ahmed: So, two thoughts on that. So some property I do hold for the long term. So if it is a multi family investment or multi family development apartments, I tend to hold those for the long term, meaning 5, 10 plus years because that's long term income, generational wealth and property that is providing an income for my family and cash flow for my family. Now if it's a smaller property such as an industrial building or a commercial development, I will go and buy the land, build it and then sell it to an end user such as someone who needs a building for their own business or what have you not. So I will build to sell smaller property and the larger multi family stuff I will build and keep it or buy it and keep it.
Marysol: You recently had an article on Business Forbes. Correct me if I'm wrong.
Ahmed: Business Insider, yes.
Chapter 3: Residential vs Commercial Real Estate (3:03-7:26)
Marysol: You mentioned on there how you have upwards of 100 units, more than 100 doors in multifamily real estate. Now, tell us a bit about that background and the commercial world because there are two different monsters right?
Ahmed: A bit. Yes. So I currently have close to 200 units in my portfolio right now. I got 300 under construction and another 300 getting planned and designed right now. So there's a 600 unit pipeline and the difference I see between multi family units, you know, residential type units are the way those properties are managed and operated versus the construction and development of commercial property. So the multi family property definitely has a more management-intensive aspect to it. You have managers who are dealing with things all the time such as rent collections, damages, disputes, repairs, maintenance issues, issues with the tenants, issues between the tenants, property upkeep - things along those lines that are almost like a daily ongoing occurrence on a larger property. When it comes to some of the commercial properties, those are less management intensive because they may have less tenants or the tenants are businesses and they're very self-sufficient. So all you really need to do is make sure the bills are paid, the trash is picked up, and that the maintenance and the landscape guys get out there so we can keep the property clean. But for the most part the tenants usually take care of themselves because they are businesses.
Marysol: Got it, and with the business lease, that rent is typically upwards of $10,000 on average, maybe depending on location?
Ahmed: Yeah, that all depends on the location. Like some of the apartments I have out in Phoenix, the rents are $800 or $900 a month for a little studio, one bedroom apartment. Right? But then I have some commercial property where I have Nashville, Tennessee, there is a 7/11 paying $6,000 and $7,000 a month for their space. So it all depends on the size and the square footage. You know, I am building an industrial building in Ontario, California. That building will be 30,000 square feet, and once that building is completed, the rent will probably be about $50,000 a month on that or more. So it all depends on the size, location, the type of use and what you have not. So for that $50,000 rent has to go cover a very expensive mortgage. So that's probably some of the reasons behind that as well.
Marysol: Right. So what would the mortgage be on that property, that size of the land?
Ahmed: So the Ontario property is going to be about two acres, give or take. The building will be 30 to 35,000 square feet. My construction costs on that property will be 30,000 square feet, that’d be maybe $9 million plus the land, which is worth another $5 million. So you're all in at 14 to 15 million. A 14 or $15 million mortgage could be, you know, *EXPENSIVE* I don't know the math at the top of my head, but you could be looking at a 30 or $40,000 a month mortgage, easily. Yeah, depending on how much equity and capital you have into the project, but you know 30 or $40,000 a mortgage and your rent is 50 to $60,000. There's not a big difference there sometimes. So it all depends on your cost of the land, how much you built it for, and how much you're able to rent it for. It's all part of real estate development.
Chapter 4: Ahmed’s Upbringing (7:27-9:20)
Marysol: Awesome. So for those of you who are only exposed to residential real estate, this interview today is very eye-opening because it's entering a different world. And so I see this as for people who want to own, say, a gas station or even, the territory where automobile sales shops live, right? So these are huge spaces, obviously bigger land, so bigger rents, bigger mortgages, leases, etc. So, Ahmed, what got you into this space? Tell me about the Ahmed 10 years ago. Where were you?
Ahmed: I think it was, you know, my whole life. I grew up the son of an immigrant. And when you're the son of an immigrant, you do everything yourself. You don't hire anyone, you don't go anywhere for anything. You do everything yourself. So, I grew up working in my father's gas station for many, many years and I would paint the gas station, I would fix the gas pumps, I would pressure wash the outside, I would fix the ice machine. There's nothing that we hired anyone for. You did it yourself, it is pretty much DIY life. You know, it's an immigrant life. And I'm sure you would understand that too. And it was good though because it allowed me to do what I really loved, which was putting things together. I loved fixing things, I love putting things together. I loved working on my car, I loved putting legos together as a kid. I loved, you know, just taking bits and pieces of anything and creating something out of it. So after college when I got into the commercial real estate business, I was able to do that, bring clients, customers, builders, developers and bring all those pieces together and let them go and put together a completed project and then going from there, I got into construction, which is really up my alley and I was really good at because it allowed me to do that even more. And now I'm doing it for myself as an investor developer, taking all those bits and pieces, land, financing, contractors, architects, engineers and putting all those pieces together to create something. And at the end of the day, I created something that actually pays me. So it's a pretty good, pretty good gig I have, I think *DEFINITELY!!*
Chapter 5: Ahmed’s Team (9:21-10:48)
Marysol: So, tell me about your team because obviously it takes several people to do that finished product. Right? So is it you and do you have an executive assistant? Who else is in your office?
Ahmed: So right now, it's been me for a while. I am hiring a few people right now to be in the office, especially the executive assistant and probably a project manager very soon, but depending on the project or depending on what I'm working for, I'm always contracting out to those professionals that I need to help me on that project. So if it is an architect and an engineer for that design, I will contract them for however long it takes them to produce that design. If it's a contractor or subcontractor who's gonna build the property for me, I will contract with them for that amount of time. If it's an existing multi-family property like we have, I will go out and hire a third party management company and I will interact with them. While they do the work, I manage them. So it really is, you know, learning to be efficient by bringing in the team as you need it and knowing who the team to go-to is and who are the best team members and going and bringing them together when you need it, as you need it, for as long as you need it.
Chapter 6: The Process (10:50-12:05)
Marysol: So it sounds like you outsource a lot and you're working with several people, several components to finish this puzzle piece of work. What takes the longest?
Ahmed: I think right now, especially having a lot of projects here in Southern California - because right now I have projects in Southern California and I have projects in Dallas, Texas. I think the biggest thing right now is the time it takes here locally to move a project from conception to approval and you get ready to start construction on that. The governmental regulatory process here in California is really, really slow and quite restrictive. It's almost like there's consistent hoops you need to jump through while other states and other cities and other counties are much more business-friendly and they welcome your business and they welcome what you're trying to do and they make the process a whole lot easier. So right now the biggest hurdle here: one, there is a lot of competition locally. That's for sure, but I really think it's the process of getting your project from start to finish through the city or the county and getting those approvals to start construction because the governmental policies here in California are just really restrictive and very slow. And even though they say they're pro-business, I kind of feel like they're not.
Chapter 7: The Future (12:06-13:45)
Marysol: So do you see future Ahmed and business going elsewhere for future developments?
Ahmed: Yeah, I'm already on it. Already looking, doing more and more out of state. I already got a few projects in Texas that I'm a part of. One's already under construction, another one will start soon. And then I'm actually looking throughout Arizona and Texas and a few other states for more opportunities because as much as I love living here and as much as I want to do business here, it is not necessarily worth the time and the effort and the brain damage I go through sometimes just to kind of move things forward here. I'd rather just go somewhere where they appreciate my business, they appreciate my efforts and appreciate my willingness to bring something to the local economy versus here, where it almost seems like it's the opposite.
Marysol: I hear you on that and it's understandable. What are your thoughts on the east coast, particularly Florida?
Ahmed: Florida? I love Florida, have a lot of friends and a lot of businesses. So it is on my list of places to look for opportunities. As much as I would love to do Miami or Fort Lauderdale, that's a bit restrictive. I'm more looking in Northern Florida, Orlando and Tampa areas because I do see a lot of opportunity there as well. And the business-friendly climate that they have is also pretty appealing as well.
Chapter 8: Investment Advice (13:46-17:09)
Marysol: For sure. It's humid, hot, and beautiful. Kind of like here, Nuevo Nayarit, Mexico. So home away from home. Let’s talk about INVESTMENTS. Now, looking at things from an investor standpoint, we talked a bit about syndicates before the call. You also mentioned in that Business Insider [article] how you prefer people really doing their homework, due diligence when it comes to choosing the right [Biz] partners. You mentioned something about comparing two companies like Vive funds or another, can you tell me more about that? The differences.
Ahmed: So when people are looking to invest, most people think their only option is Morgan Stanley and Charles Schwab, right? Those are their “only investment opportunities,” when really there are a lot of, a lot of other opportunities out there, but they're just not advertised or brought to the public, like these other companies do it. So you have a lot of real estate opportunities to invest in as well. It is something that I'm looking into about bringing investors on board with me in the near future, but for people looking to invest now and this is what I do - because I also invest in some other projects and other real estate ventures as well. I look at the sponsor. Right? So the sponsor is technically the person of the entity leading that, that charge. They’re leading the development or they're leading the investment. Right? So when it comes to a new development fund, someone's building a new project, I look at, Who is that sponsor? Who is that general partner, who is that person raising the funds to do this development? Are they experienced? Are they trustworthy? Do they have a good team? Do they have an existing business? Do they have a good track record of this? Right. So those are things that I try to evaluate before I place my money. So I have one investment with a team in Las Vegas building some condos. I know the developer, he has experience, he's highly organized, highly regarded, has an amazing team behind him. He has the right people backing him up, the right contractors, engineers, partners. And he put together a really good team for this project. I felt comfortable with this. I like the location, I like the design and I like the returns on my investment. So I invested with them. Another thing you do is, if you're looking at a syndication: where someone goes out and purchases a property and then they sell the shares or sell a majority of the shares, the majority of that ownership goes to investors. So it's almost like the reverse. And I also look at the general partner of that syndication or technically like the sponsor. Who is this person who bought the property and is selling out the shares to us? Do they have experience, do they have a track record? Are they known for going in and taking a property and improving it and getting a better return and knowing how to operate that property very well or are they just doing this for the first time? So when it comes to this kind of stuff, I always look to see who's leading the charge, who's in charge of this opportunity? And do they have the experience, the know how, the knowledge and the team behind them to make it work?
Chapter 9: Syndication Processes (17:10- 20:06)
Marysol: Right. Very good tips. Awesome to hear because there is a difference, right? I was looking up before this call - syndication versus what else is out there? And I like how you outlined that for us in terms of the steps. It's either the opposite, like finding who is in charge of leading the operation, the project. Or someone who already purchased and is looking for that capital to purchase more and then disperse the funds. Right now, some companies have syndication fees on top of just a lump sum to look for a project.
Ahmed: Correct.
Marysol: And that's a big differentiator as well, correct?
Ahmed: Yeah, it's a very standard practice when a syndicator will go and buy a property and syndicate or sell the shares of that property to the investors. So let's say they go out and buy a $20 million dollar property. Well, $20 million is a lot for either you or me or somebody else to invest in. But they will say, well, if you want to come in with $50,000, $20,000, $100,000 we'll let you in. Right? So we invest a small amount into that syndication. Now, a standard practice is charging the fees because the sponsors of this syndicator are only receiving dividends like the rest of us, but they're putting the work into it on a daily basis. So they have an asset management fee or financing fee, a disposition fee, and acquisition fee and things along those lines. So these fees kind of go along with the daily operation and management of that investment on behalf of all the investors. So, instead of them just getting paid at the end of the deal, three or five years down the road, they're getting paid continuously to continuously provide a service to the investors as well.
Marysol: That makes sense how there is this operational cost, not just “Okay, give me my monthly capital.”
Ahmed: Yeah. I'm like, if you want to invest with me, you're gonna invest with me, but I need to make money for the next few years managing your investments. So there are some small fees that I will be taking.
Marysol: Yeah, everyone should get their - what's the expression? Give credit to where credit is due. So that's fair.
Ahmed: Yeah. You get what you pay for. You really, you really do.
Marysol: Yeah! You get what you pay for the team, the experience, etc.
Ahmed:I don't mind paying somebody some money if they're gonna make me a whole lot more.
Chapter 10: Invest in Yourself (20:07-20:30)
Marysol: That's right. And that's part of the rationale of why I chose to sit at the front in that event where we met .You guys should invest in yourselves. So Ahmed loves Danny Fleyshman. He's gone to his events; Albert Preciado, he's got *family immigrant roots* is FIRST GENERATION as well. He has his own events and who knows, maybe yours truly will have her own first Un Billón events.
Ahmed: I would love that! That would be great.
Chapter 11: What Does Un Billón Mindset Mean to You? (20:32-23:07)
Marysol: That's what it's all about, guys, leveling up! So for Ahmed, what does cultivating or having a Billion Dollar Mindset mean to you and how are you committed?
Ahmed: I'm sorry I lost you for a second.
Marysol: Okay, I'll ask again. So, question of the show, what does having a billion dollar mindset mean to you? And how does Ahmed promise to fit that definition?
Ahmed: For me? The mindset is never having a destination or shall we say the destination will always be out of reach. Right? For me, it's the journey. To me, every single day of improvement or moving forward to me means everything. Some people just want to make it. I don't want to make it - I want to continuously just keep going and going because if I do that, every day will be a reward of blessing to me, right? So that's my billion dollar mindset - never having the destination, just knowing that I am on the right path and I'm continuously improving and at the same time, it's all about leveling up, right? And you know, like I say a lot and I advertise a lot “building better,” And that's not just about building better projects or building better real estate developments or building better buildings. It's about building better in every aspect of your life, building better mindset, building better habits, building better real estate development companies, building better podcasts, building better financial services for your clients and your customers, just building better and leveling up in every aspect of your life because a lot of people think that everyone else is competition. There's all this competition in real estate and competition in development and competition in all aspects in between. But to me, if I can go and show other people how to build better, build better real estate, better projects, better architecture, better engineers, that means everything around me is going to be better and if everything around me is gonna be better, it's just gonna lift me up to do even better myself. So I don't see people as competition; I see people as support. So the more I support them and level them up, the more that I'm gonna level up myself. That's my billion dollar mindset.
Chapter 12: Outro / Ahmed’s Social Media (23:07-24:10)
Marysol: Billion dollar mindset! Thank you Ahmed, lovely. So that's all for today, guys. To contact Ahmed, please tell us where we can find you.
Ahmed: So the best way is to catch me on Instagram, which is @AhmedBuildsBetter and starting on January 2nd, I will be launching a Youtube series, a real estate development series every week. I'm already six episodes in. So there will be a bunch of real estate development-related content on my Youtube channel. So you can find me on Youtube as well.
Marysol: How exciting! Everyone follow Ahmed on Instagram so that you could be more in touch with future Youtube videos and subscribe over there also. So thanks so much for your time. I look forward to growing our relationship and seeing where this path of life leads us.
Ahmed: 100%. Thank you, Marysol.
Marysol: Thank you. And as always, turn on the notification bell so you know when the next show is releasing. Bye everyone, Un Billón!