From Moscow to Multifamily with Igor Shaltanov, Ep 93

Today's guest is  Igor Shaltanov, he is the founder and managing partner of Avista Fund, and a former professional athlete who transitioned into successful entrepreneurship and real estate investing.

In this episode, Igor shares his journey from Moscow to multifamily investments in the US, starting with renting out an apartment and progressing through single-family homes. He highlights the importance of market understanding, teamwork, and trend awareness, having experienced both successes and failures. 

Igor's story demonstrates the resilience and strategic thinking vital in real estate. Transitioning to fund creation, he delves into passive investment strategies, property management challenges, and his philosophy on success. 

His multifaceted approach embodies the dynamic nature of real estate, showcasing the necessity of adaptability and seizing opportunities across diverse asset classes.

Episode Topics

[01:19]  Meet our guest, Igor Shaltanov
[02:49] The Power of Real Estate: A Personal Journey
[12:59]  Transitioning to the U.S. and Building a New Life
[19:44] From Saving to Investing: A New Chapter in the U.S.
[22:11] First Foray into Real Estate: Learning from Experience
[31:50] Building a Syndication Portfolio: Operator Vetting and Asset Classes
[40:29] What is one red flag every investor should look out for?
[40:59] What is a myth about the real estate business?
[42:25] Connecting to Igor

Notable Quotes

• "My humble beginning of real estate investment taught me supply and demand, understanding what people want, and the obstacles in renting." - Igor Shaltanov
• "Information wasn't always at our fingertips; it was more about learning by doing." - Tim Little
• "Trying and failing, trial and error. You fail a couple of times and you'll find out." - Igor Shaltanov
• "A lot of passive investors want to be hands-off. They're high-income earners, too busy to dive into due diligence." - Tim Little
• "Many stay with money managers expecting high returns, but often get little above inflation." - Tim Little
• "Stick to your strategy, avoid chasing shiny objects. Conservative operators who stick to their plan are the real winners." - Igor Shaltanov

👉Connect with   Igor Shaltanov

• LinkedIn:  Igor Shaltanov
• Website: Avista Fund
• Email: igor@avistafund.com 
• Telephone: 310-529-1067

👉 Connect with Tim

• Linkedin: Tim Little
• Instagram: @tim_at_zana
• Email: tim@zanainvestments.com
• Visit www.ZANAinvestments.com for more info on Tim and how you can passively invest in multifamily real estate
• Get your Passive Investor's Cheat Sheet FREE

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https://podcasts.apple.com/us/podcast/journey-to-multifamily-millions/id1634643497

Transcript

[00:00:00] Igor Shaltanov: 2010 and then 11, maybe we just started the business and we need to cover all the expenses and rentals and the gyms and employees, right? And stuff like that. And, but then. After five years to start to cash flow and then all of a sudden like the same problem, right? You got more cash when you just set your life for it, right? And then that access to cash starts to think and then I start to sell my apartments, right? I sold my first apartment and let's say I think the first one was two hundred seventy one thousand dollars. So when I transferred here I was like, oh But I don't need that money. I do work every day.

[00:01:09] Tim Little: Hello, everyone, and welcome to the journey to multifamily millions. I'm your host, founder and CEO of ZANA Investments, Tim Little. And on today's show, we have with us Igor Shaltanov. Igor is founder and managing partner of Avista Fund, and a former professional athlete who transitioned into successful entrepreneurship in real estate investing. Igor, welcome to the show.

[00:01:30] Igor Shaltanov: Thank you. Thank you, Tim. Thank you for having me. And then it is always a pleasure to share some experience though.

[00:01:34] Tim Little: Yeah. And obviously I want to get into Avista Fund and real estate investing cause that's what our show is all about. But you do have some other interesting things in your background. So why don't you tell everyone how you got to where you are today and how you got started?

[00:01:50] Igor Shaltanov: Oh yeah. So that's a great story. So I was born in Russia, Moscow. And then,I would say just below average family, right? We never had financial, I would say security or like excess of financial. and then, it got me started with sports, right? And I saw myself doing the sports and that's going to be the way out, right? For me, to travel the world and get the experiences I never otherwise would be able to get. and then, maybe at the age of 15 or 17, I'm outside, right? and then I'm talking to my friend and he's Oh, you know what? I'm going to pick up the money from the guys. I was like, what do you mean money from the guys? He says, Yeah, so we're renting the place and then people are paying and then we're getting the money. And at the age of 15 in Moscow, I was like, that's no sense. What does that mean? So what is that all about? And then You just pick up the money. So it just sounds like weird stuff. Anyways, that's the first time I ever heard about people living in the places and then they getting the money, right? If you just give them the place to leave and that, that time, right? I was like, wow, it's something weird. I didn't pay attention as much. And then. As I became more professional, And then I became a more professional athlete, I started to make money. and I started to make more money than my mom, let's say at the job and then more money than I need to spend. So it gets me going saying, okay, what do the people actually doing with money? So what's the best way to, I wouldn't say invest because it, for me, it was like, what's the best way to actually manage that thing. So what is that thing about? So at that time, back then, we had an apartment and I was like, not this story. So no, my mom just got an apartment, for example, a spare apartment, right? Which is not for just a single purpose of living there, but then for the purpose of what we're going to do with that. and she said, Oh, you know what? That's going to be sitting there on the sidelines, right? And then we might use it, might not sometimes. And that's when, in my mind, that first conversation just popped up. I was like, man, I heard about, listen, you can rent it to the people. And people can leave and pay money for that. and then I talked to my mom. I said, listen, let me get this new apartment. I'm going to remodel that. I will move you over with my dad. So you're going to be both living in a brand new space, right? Which is absolutely fabulous, right? And you guys deserve it. They have lived there for 25 years, I think in the same place. and it's outdated, right? And then I said, I'm going to remodel that. I move you guys. So we remodeled that. And then I'll rent it to the people. And this is exactly what I did. It took me about six months to convince them, right? Because they were completely unknown. I would say they were like, what is that about? We don't want to move to a new place. We got used to our new place. like the forest, the parks, the, the nature and all of that stuff. And I was like, no, listen, so you guys deserve the brand news. It's all beautiful. You guys try it anyway, after six months. They moved over to a new place, it's already remodeled, beautiful, and then, I just put some, I would say, back then it's like a lipstick on that old place, I just put brand new wallpapers and this and that, the kitchen, a little bit, upgraded, and then the bathrooms, we checked the plumbing, rented this to two This students, I would say, right? the young guys, two young guys, young professionals, they worked at the firm. I think they were lawyers or something like that. And then they were basically splitting the payment in half, which is a lot easier, right? To pay. And I didn't understand back then. I didn't understand some of the best ways to do that, right? Because now you split the income between two different companies, two different employees, right? And then employers. So basically, That first experience gets me going. And then the aha moment when you receive the cash at the end of the month, because again, remember Russia it's in the 2000s, right? It's all paid in cash. It's not about leverage. It's not about. the banking that it's all cash, right? It's all paid off. There are no payments, no taxes. if there is like 0. 5, 1 percent or so, and then, it's not taxed back then. So basically you received the cash, which is my mom received the cash, I would say, which is equal to her monthly earnings. So Haman was like, Oh, he can rent the place. And you basically, as much as you work at work, You get the same amount of money as you don't work and you rent it to somebody. And it was just an absolutely amazing experience, right? And then we've done it for maybe about, I would say probably five years or so, right? The people were paying. So we're getting that cash. Cash was going to the bank account, right? The bank account is accumulating cash. And then, And the five year mark was sold at, right? We sold it at a big profit, right? So meaning, so we took that money and we bought another two apartments, right? And now we were more strategic. Okay. Where's the best place where the people want to leave. Now we start to become more sophisticated, right? Saying. Okay, what's gonna end back there? It was the playoff. It's a brand new construction. You pay less money, a lot less money because you've taken that risk. So by the time it's built up, it's about maybe 20 percent more, right? It's more. And then by year five, it's at a price even better, right? Even more price though, because of all the infrastructure around the apartment building. It's just, yeah. Completed and finished. And then, one of my experiences gets me going, right? I bought one apartment with two parking spaces, right? The apartment needs attention and the remodeling, let's say the parking space, not and then we calculated there's maybe about 500 people. Let's say, don't quote me on numbers. 500 people living in apartments, right? There's only. Let's say 100 places where you can park your car And then there's a garage like a big open space garage right next to it, right? And it's sold for maybe let's say ten thousand dollars, right? After three years when everybody moves into that building, that one parking space is like triple the price. And the reason is because of supply and demand of this so those are little experiences This is the beginning of my real estate career. I started to really understand supply and demand. What do the people want? So why would they pay money? So what would they absolutely not want in their place, right? What's the obstacles, right? If you want to rent the place, if you want to be continuously renting, right? year after year, tenant after tenant, right? So this is my humble beginning of real estate investment.

[00:07:44] Tim Little: Yeah, that's great. And I want to dig into a couple of things cause I know people are going to be listening to this show. And the first question they're going to ask is, okay, so you play professional sports. So what did you play? Like people are going to want to know what you did. So tell us that before we, we get into some of the other stuff.

[00:07:59] Igor Shaltanov: Oh yeah. So I play water polo. It was professional water polo. And, bring it up in the United States. It's not a super popular sport, but the funny story I'm always telling all the people, that there's only two people from the United States playing in Russia, right? It was one of them. That's Adam Wright, who is the UCLA coach right now. He's a four time NCAA champion. for UCLA. And the other guy is Ryan Bailey, who is a commercial broker in Long Beach, where I'm at. I'm close by, both UCLA and Long Beach, and I'm still in touch with them. So I'm still connected to them. They helped me a lot during the U. S. accommodation time.

[00:08:31] Tim Little: Yeah. So for anyone who is not aware of what water polo even is, it could be like brutal and very taxing because, if people want to think about it, just think about treading water for a really long time while trying to play basically handball or soccer with your hands, while treading water with everyone throwing elbows, as you do it. So it can get pretty violent, even if unintentionally.

[00:08:56] Igor Shaltanov: Yeah. Sometimes it's tough.

[00:08:57] Tim Little: Yeah, so that's awesome. And then the other thing that I think I want to point out is, here in America, obviously, everything is about capitalism, right? About money, making money. And so I think people need to get into their mind like, oh, who wouldn't know that, people rent and people make money from that. But the truth is, a lot of people that even live in the U. S. don't think about it. It's just the way it is, and even I, used to be a renter and would pay my rent every month, but wouldn't actually think about the person that's on the other side of that. And doing it as a business. So for you seeing this in, post Soviet Russia, they haven't had nearly as long with this capitalistic experiment, if you will, as we have in America. So for you and many others, it probably was a relatively new thing to see these different ways of making money. Is that a pretty accurate assessment?

[00:09:52] Igor Shaltanov: No, it's a really good assessment. the other thing, just remember. And I don't think we still, we take it for granted for sure. If you look at the YouTube development, when was the first video of YouTube, it was like 2010, nine, maybe when it's beginning. thing like you became like, Oh, you can YouTube something on it. You, if you want to hit the hammer, go on YouTube and put it in. So it's going to be right there. Same as real estate. So back then, because of I didn't remember anything like a Russian book about real estate. Like the Russian actor who's showing you how to become wealthy through real estate. You know what I mean? So that was just intentional. It was just real. Listen, we got to go through that point of, okay, number one, how to find information, what type of information you want to find. So what to do. and then again, some of that was just a try, right? Trying and failing, trial and error. And then, so you fail a couple of times and you'll find out, right? But then. So the intention of me being a passive investor, that was just a very subconscious internal saying, listen, so I want to be investors. Like I want to invest my money. I don't want to be like, really, I don't want to be the best employer. And again, so the sports and going through sports, it gives you that understanding so your body can take only so much, so your body can handle only so much.

[00:11:10] Tim Little: If tomorrow you break your leg. and then. it's going to be something consequential. It's not just, just a simple fracture, And stuff like that. If it's like you've done, you're not going to get any income anymore. And I think it gives you a sense, an immediate sense of what you need to do in the future, For you to be able to earn or receive that income, Still without putting your body into work. Yeah, and I think that's an important lesson for any professional athlete or any high income earner,for that matter, right? Because even with a high paying office job, if people aren't actively investing that money when they're getting it, early in their careers, then anyone can get fired. Anyone can get low and sure, they may be able to find another job, fairly quickly, but there may be a period in there where they have to use some of those reserves. to pay their bills and stuff like that So I think it was really smart of you to say. Hey, i'm making this money now. I have this opportunity. Let me find out how to invest it because you obviously didn't know then and so Which goes to the other point that you made which you know information hasn't always been at our fingertips, right? So for the younger viewers and listeners,we didn't always have a cell phone in our pocket that we could immediately Google the answer to any question and watch a video on exactly how to do it. there was more research involved or. More like what you talked about, which was, learning by doing, which is, I think what you did in large part and yeah, you may have gotten some things wrong and you got some things right, but with each time you got more strategic, like you said, in, how you were evaluating and buying properties, in order to make more money on the next one. So it sounds like we're still in Russia at this point. At what point did you transition from Russia to the United States, and how did your business evolve during that transition?

[00:13:13] Igor Shaltanov: That's a great question. And I think, again, my first intention was to save money, right? Even so I was investing, but it was unintentional. So it was just a safe number one in my mind. I can save. And again, when I'm saying safe for myself, I won't buy you, so blah, blah, blah, like you name it, right? And then, safe from, whatever happens, because you never know, and I've been through multiple cycles of when you have that asset, and then, God forbid, you need the money, so you just put it on the market, and it's gone, and you got all the capital. you need it, right? and it could be again for the opportunity or it could be for, just to survive, right? You never know what happens. And then, the transition happened again. I was, I was, I had a law degree. My second degree was law. And then I was working as an assistant judge in Russia. And then, working through that system, and then I'm talking about the legislation, And then the court system and all that stuff together, I was looking at my peers, like 20 years ahead of me and whoever, like almost a retired person. And they do,they do have a really good benefit. They do. But then I was looking at their lifestyle. I was like, man, I don't want to live like that. So number one. They've been at work from, let's say, 7 in the morning until 9pm, right? And they, in the late 9, I was like, what is that for? I don't want to live like that, number one. Number two, they've been under the radar all the time. Why? Because they all drive the worst cars possible, right? Put the worst clothes possible and for the reason is so because nobody's gonna say Oh you guys taking the money for making decision right and stuff or maybe you just you know Doing something under the table and they've been always like a downgrade in their lifestyle I don't want to live like that either So that's this is not my intention, right? You can give me all the money in the world, but I want to use the opportunity, right? This is why you have money because I want to use the opportunity to travel to Drive, whatever kind of car you want right to buy if you want to buy something right then and again So I said it's not going to work. And then my wife She's a professional basketball player. I was a professional water polo player. We met in Turkey and then when we met her, she said you know what my brother is, just got drafted by clippers, right? They left to los angeles and then so they're going to be leaving out there and then You It was probably four years after I was like quitting my job from the court, right? And she says, you know what, we just built a house in Russia, right? We all set for life, we've got the cars, the house, it's all paid for, the apartments. You don't need to work as hard, right? If you want to cover your basis, right? And then she was like, you know what, let's go visit my parents. And it's, I would say it's November, 2009, November, 2009. And it's in Russia, it's like snowing, like it's super cold snowing. And then we just finished the buildup, right? We were tired. We feel accomplished. And we'll say, yeah, let's go. And we grabbed my son and then my wife, basically taking me to her parents, In Los Angeles. And we landed on Manhattan beach. I don't know if you've ever been there. but then we landed in Manhattan beach in November. Beautiful weather compared to, right? And then people laid back, everybody in flip flops, shirts and t-shirts. And I was like, Nobody told me people can live like that. I was absolutely shocked. Everybody's smiling. Everybody's so polite. You guys come here, please sit down. How are you guys doing? Strangers are smiling and asking you how you feel. and I was like, I was absolutely in love in the second one. And then Especially my love for the beach and looking at the ocean always right and I'm walking by the pier I was like, oh my goodness. How is that possible? So and then we sat at the meeting and the dinner table and we had a manager who was helping the family and she's saying Why are you guys coming back? And then she just asked one question because we had a ticket there. We had a ticket to Los Angeles and back. So we didn't buy a ticket. So we said we're going to get back. I was planning to open a new business. And we had a bunch of different plans, in our mind. And when she asked that question, it just struck us immediately. We were like, Oh, boom. I was like, why do I come back? Cause I never asked myself, I asked myself, why did I come back? And the only reason why it was my parents. I was like, Oh, there's no reason. I don't have a job. I don't have, I don't know, a future. I would say, I didn't have. I really understand the system. I don't want my kids to experience that system as well. So basically when we sat down, we talked to my office, I said, listen, so we got to make a decision and I called my mom after maybe one or two days. And I said, mom, you know what? I'm not coming back. So I'm going to stay in the United States. She crashed. She was like, Oh, I'm never going to see her. grandkids, blah, blah, blah. but she respected my decision and that's how the transition happened. And we didn't actually invest in real estate because we, the cost of living in Russia and Moscow for us, because the basis was covered. And then here was just a huge jump, right? It's just night and day because it's all paid here. You need to rent and then you gotta put yourself in position when you have a business or employment or whatever. So basically we opened the business. Two months later, in March, 2010, we already opened the business. So we filed the paperwork in the state of California and the business was related to kids. Because I was a professional athlete. My first education was as a PE teacher and coach, and we started to coach kids. So basically we opened the basketball academy for kids. And then because of my brother's background in MBA. So we use that as marketing material. So because of my wife, a professional basketball player, Her father was a professional basketball player. I was a professional water polo player. So we got all the sports around to market. And then, so number one, we had a passion. So I had a passion. I can speak for myself. I had a big passion to basically share my experience. Sure. My experience of how to become professional at the highest level possible because playing for a Russian national team, the club team, and all of that in between, so basically we start to get one client, 10, 200, 200, 300, one location, two locations. So the business started to really explode. and that was the second capital event, which just gets me going again. In the beginning, it was like, okay, survival mode. So in a new country, we've got to save every dollar and we were saving, I'm telling you, like by dollar, right? And 2010 and then 11, maybe we just started the business and we need to cover all the expenses and rentals and the gyms and employees, right? And stuff like that. And, but then. After five years to start to cash flow and then all of a sudden like the same problem, right? You got more cash when you just set your life for it, right? And then that access to cash starts to think and then I start to sell my apartments, right? I sold my first apartment and let's say I think the first one was two hundred seventy one thousand dollars. So when I transferred here I was like, oh But I don't need that money. I do work every day. So I have my business, which is cash flow. I got, let's say 300 grand. I just combined my savings. And then my first experience was, Oh, you can not live in real estate. I was like. I was working out at the gym and then I had a friend, his name is David. He's a teacher, like a normal school teacher from New York. And I was like, David, you look amazing. He may be about 70 years old or so. You look amazing at 70. You're working out every day. Because I was working out at the gym. He was working out at the gym. We'd go to the sauna and then we'd talk to each other about money and finances. literacy and stuff like that. And he was like listening to me, listening to you. I was like, David, I got a bunch of money. I don't know what to do with that. Maybe I'll buy real estate. Maybe I'll do this. And he was like, Oh, you know what? There's a stock market, right? And then there's all of that. You can buy Apple stock, Facebook stock. And I think he was buying Facebook back then, which is a great decision. And then, he was like, you know what? I got a guy. All of them are bad, but I got one guy and I would probably refer you to him and then he will take your money and he'll manage that money for you. And two years into investments, he gave me the, his name is Kyle. I made a trade. I think I made a price. I think that's a company. I gave it to him, right? And then he was like, he started to manage that, capital for me, right? And then, I was like one year. I look at the statements. Okay, the market goes up two percent. So the fee charged 1. 5, your earnings 0.5 for a year for 12 months. I was like, man, I can't believe it.I can work in McDonald's and make a lot more money than just, putting this on the stock market was that amount I was like, what does that doesn't work, something that's like broken. So it's going to take me 25 lives to get great financially dependent. And then that was my first experience. The second experience was when the second year passed and then, it was just a Russian currency drop, right? I think. I think 1 became, it used to be 30 rubles and became 60 rubles basically. But the adjustment in the real estate price is happening. So way Slower than they're just adjusting in currency. And then I was like, I called my broker. Like Kyle said, listen, I found the real estate deal. Can you release like a couple hundred thousand dollars? I'll buy it. And then I'll be renting to the people. I feel like it's a much better model than just being in the stock market. And I paid some money from the brokerage account. And then I bought multiple apartments and then I started to rent them and I started to manage them again. And then I bought a single family house. It was an outdated kitchen. It was absolutely like the, I would say, trashed backyard, right? So what I did, I just basically remodeled the kitchen. I just painted the whole thing. It was a good bonus, right? But then I did the whole outside of work, the front yard, right? Basically, I just became a beautiful stucco, right? And then changed, changed a little bit of flooring as well. It's become a good piece of real estate,on the street. I just received California's, mid to low, probably, B minus class,neighborhood, and I rented to people, and that was my first experience of renting in the United States. I started to, it was the single family houses, and then I started to really understand So how much it takes to remodel this remodel that it was apartments a little bit smaller scope of work was a single family. It's a lot larger, right? Just because all of this area is right outside of the house and then you got a roof and all that stuff. And then, It was successful for me. Why? Because I was at the top of the wave of the market, right? They just bought it low, right? And then whatever I did, The price of that house was going up no matter what. And I understood that later. but then my experience of leveraging, cause I wasn't, I was, I put 20 percent down, I think. And then I was paying the mortgage every month. And when I remodeled it took about six months. When I rented, it took about maybe about a year before the first tenant moved out. When they moved out, I started to pay the mortgage myself. And then,month one passed, month two passed, I'm paying off my mortgage. I sit down, calculate the profits from the house, just the per profit without speculation on price. I was like, okay, that's zero, maybe minus, right? Something. Why? Because you are paying that mortgage every single month, right? And if you didn't find a, if you didn't find a tenant fast enough, right? You're going to be going underwater. and then, anyways, I was like, that's fine. I do have cash. I covered those payments. I start to understand it's not a business model, right? It's more like an appreciation play, right? Especially in California. And then when the second tenant moved out, I really understood, okay, now I'm again paying that mortgage, combining my income for the last four years, for example, right? And then you just look at your payment coverages for debt rate service. And then just, nothing is working. I was like, man, single families, absolutely. Maybe if you own multiple of them, but again, now you don't want to Extrapolate the maintenance headaches or the maintenance requirements to carry that portfolio. I was like, no, this is not the place I want to go into. I was successful. I got lucky. I sold that thing at a profit. And my dream was to buy real estate. It was larger like the multifamily units. And I start to become more sophisticated. I start to listen to biggerpockets. com. I think it was 2017, 16 maybe or so. And then, they start to talk about, Oh, you got one roof, you got a hundred units and you got all the people, And they all work in different places, They all pay and cover their apartments. It's a lot more affordable for them. So it's a working model. You got enough being on like enough meat on the bone so you can hire property management, it's going to be onsite. It's going to be a professional company, or you can just. Third company in that thing. So anyways, I started to really educate myself and then I was walking on the street and I was like, I want to buy an apartment complex. I want to buy an apartment complex like manifest in myself. And then in 2018, 19, 19, I met my partner Nikita. So we get together, we say, listen, and he shares his story of buying four units and like two buildings. I don't know. I don't remember the two buildings in Florida, right? Multiple units. He said. I had a great experience, but it was probably four units and two units, duplex and fourplex. And then he said, but it's a lot of management work. I got lucky. So the price went up. I didn't fix some of the things I just thought I, I thought I'm going to fix. So basically I sold it at a profit and I sold some of my things as well as profit and combined for splits by, apartment complex. And we'll look at California again. We didn't know the law for California. So it's more,the tenant friendly than the Lord family, right? Place right to be. And, We're dreaming about buying in California, let's say it's, let's say, 50 units, maybe the minimum we want to go down to the unit count, but then any price you touch, let's say, 15 million, 20 million, you get, I don't know, I 20 units yesterday, it was like 7. 7 million, so the price is insane, freaking, the price is so high, and then compared to the unit price, the rental is so low. You're like, Oh, how much do you make 1 percent at 2 percent a year? Like it's like ridiculous because of the prices are so high. And then it will start to go into the, I think I talked to my mentor and then he talked to a couple of his friends and they were, Oh, there's syndications. And we're like, wow, what is that? It was the same aha moment as I had back in Moscow in Russia. What is this rental? What's the syndication about? Like you guys tell me like, go tell me faster. And then by that time it's again, 2020, I think it's a lot of different outlets, a lot of different seminars, groups and stuff. And we start to digest whatever we can. You know get our eyes and hands on right and the mind on so I start to listen to different podcasts right then we start to be like a part of different communities like brad soundrock There's a raise masters. There's this group that group so we start to really Dig into different operators. We started to really learn what the syndication was about so that was just my Transition from real estate to syndication. So I'm gonna stop here. 

[00:29:21] Tim Little: Yeah, no, and there's so much in there that I can dig into. I think the first point is that, like a lot of people, you wanted your money to work for you. So you went to a financial advisor who was managing your money. And, like most people, you went in there with the assumption that you were going to make money like that's their job. and the amount of money, the performance was not what you were expecting right after fees, after marginal performance of the stocks themselves. And I think the important thing to understand is that a lot of people just stay Never stop there. They just keep their money locked up with these money managers who are getting them You know returns that are barely above inflation and then you know with these large fees but they think they're doing something right and they're taking action and They just assume it's the right thing to do because they don't know anything else So I'm glad you were able to one escape out of that But then to transition to real estate And not to say that there's not a place for both for active money management, but one, they have to be good at it. People need to understand upfront before they start the fees associated because those can just eat away at profits. if those fees start to pile up. so I'm glad you were able to transition there. And then the other piece was the,Like so many people starting off with single family house, realizing the limitations there and also understanding that,you're able to scale by going to those larger properties, even whether it's a duplex or a quadplex, at least you're getting the benefit of, mitigating some of that risk. When someone moves out, like you said, you were paying 100 percent of that mortgage when you did not have a renter there. If you even have a duplex and you have a renter on one side, but not on the other, at least someone is helping you pay that mortgage if you have that one unit. rented. So that's one thing I always try to impress upon people is if you're investing in real estate, that's great, I still would argue that single family is the riskiest for that reason alone. and it sounds like you came to the same conclusion and then a lot of people went to syndication. let's move quickly into what you're into now with the fun that you have going.

[00:31:50] Igor Shaltanov: Yeah, that's a great Transition so I think So there's, I'll go back a little bit still, to this syndication's starter, time, because We still had a problem and then that's where the fun came from. We still had a problem like how would you find the operator? How would you find the deal? How would you find a good operator? How would you just vet the operator? And then how do you know if they are legit? How do you know? Because honestly, it's like a Wild West a little bit, right? In that sense, especially if you look at 2020, 21, 2020. 2022. Why? Because like I said, it's been like going into the waves. It's going uptrend whoever is doing whatever. So they're all gonna win. And now when we get no water right in the ocean, it's tied up, right? So now we got all the people who actually know what they're doing. And we've been through like Tons of projects. So now we understand who's actually a real operator and who is not. And then now we understand who hadn't experienced in 2009, 10, 11, then what they were looking for right in 2020, 2021, 2022. But again, It's been like a really good experience. Why? Because, we start to build the base of the operators. so we came to the point when we have,we still have it, It's about maybe 380 different operators and then one list and we'll put the scoring system against them because it took me about a couple of years to just go dig down, connect to them, talk to them, sometimes fly to them, look at the project, look at the team, like talk to them. and then. go to the restaurant, do the basic human interaction, right? To understand what type of people there were when we paid, just simple things to pay the check after the dinner, right? Or maybe lunch and stuff like that. and the first challenge was, okay, listen, so we need to find good operators. And then I was always thinking about the people who, let's say, six months or two, 12 months behind me, I was like, how would they find out? How would they vet those people, especially if they are just starting? and when we start to invest our own money first, we start to look through the lens of, okay, is it going to be a good operator for a future partnership? Where it's probably going to be just for us and to risk our own capital, right? And then putting that every single deal through that lens, is it going to be good to refer that person to all the investments or investors we have in the future? So because we were building that intentionally in that portfolio to really vet every single operator and then the asset class as well. Because in our portfolio, we had a ground up development. Now I'm talking about asset classes. Now we've got ground up development. It's basically different applications of syndication. What does that look like right now? It could be a ground up development right then again. So in our experience, none of this worked really well. So maybe they will be, I don't know when they're going to be built out. But now it's just all. So to speak of disaster, I'll use that word. and then there's another experience when you get a deep renovation, And that's never happened. The capital was, diluted rates and another big trouble. So we had other operators when we had a floating rate. So we tried that one as well. So that's in big trouble right now because the interest rate just skyrocketed and stuff like that. But then the ones who were very conservative, who just fixed their debt, For a long term. And the ones who didn't have Napoleon or like super intense, right? The business plan to convert all the buildings from upside down, right? And stuff like that. They're all winners right now because they were conservative. They knew exactly what they're doing. They stick to their plan. They were not chasing the shiny objects, right? Not looking at different sites, right? To the left, right? We're going to buy this and that. They were like, Basically sticking into their policy array, following the investment procedures and then doing the business. and then we met those guys, what I'm talking about from the fund level. So we met those guys. So we really understood, we built a connection with them. We fly to every single state where they are, because once we start to invest, we start to understand, Oh, there's, let's say for example, Texas, right? Everybody's talking about Texas. So when everybody's talking about Tesla stock, it might be a good time to be cautious, right? Not time to deploy the capital. And that was my feeling because I had an experience in the stock market. And when everybody's talking about something, it's a really good time to sell. It's not a good time to buy this thing. and Basically, when we start to look at different states, and we were thinking about becoming an operator first, and we said, Oh, you know what? But then what if we want to be present in North Carolina? Should we expand our operations to North Carolina, open the office there, just hire the people there? There's no way. So how we can do it faster, how we can basically shift our attention, shift our like capital into different states by partner was really good operators to really bet them first, right? Understand them first, understand their intention, right? To understand their team and then deploy the capital with them. And we were always thinking through the capital. We were never thinking through operations because my partner and I, we all, we had the business, we had a great business experience and we understand what operation looks like because operation, that's a very energy intensive process. Like it's gotta be overseen by somebody. There's got to be a leader, right? And there's not, if there's no leader, it's never going to work and stuff like that, right? And it's got to be structures and got to be people. You have a huge payroll, right? And this is the company we're looking for, who's willing to do that. We were in different stages. We were looking at the capital deployment. We want to be like really good capital raisers. We want to understand the capital markets and deploy the capital in the best States, basically. From the operators. We start to look into the different States, for example, like States like Alabama, North Carolina, South Carolina. And then, we start to really intentionally connect to people who are doing the business in North Carolina, or maybe. Look at the operators that we had in the database, but they do in the projects. And let's say somewhere else, for example, again, in Alabama. what I'm saying is from that, again, from that point. So we moved into the asset class. We said, okay, what do you want to do? Do you want to test the storage? Do you want, cause again, everybody's talking about, Oh, we want to do triple net leases. We want to do it. self storage, RV parks, mobile parks. And then it's again, it's all overwhelming, but you want to be sticking to your strategy and again, we tried the storage rights facilities. We said, okay, so the storage business looks very appealing to us, right? Let's find a good operator who knows exactly what he's doing in the storage business, right? And then we found that and we found another company who's doing the,what do you call it? RV storage, right? Which is another kind of. Training and then the Tanechi thing. but it's not explored as much, right? It's not consolidated as much, but I feel like it might be the future of the segment of syndication as well. So this is my little experience from the, at least the fun background. So basically what we did, we extracted the best from our experience, personal experience first, right? And then we start to really understand who is doing it. Legit, I would say. And then,the first thing is always safe business. And we start to say, okay, here's what we're doing. We're going to deploy our own capital. Do you want to be part of that deal with us? And this is how it all started.

[00:39:29] Tim Little: Yeah. And I think the important takeaway there, for people who aren't familiar with funds, is that the service you're providing is that you're able and willing to do that research, that due diligence, that most passive investors just don't have the time or expertise to do. And, a lot of passive investors want to be relatively hands off. Some are willing to get their hands dirty and dive into Excel spreadsheets and have interviews with these sponsors and stuff like that. But a lot are not. And they're too busy because they're high income earners. They have their jobs. They can't travel to these locations. They can't, Set aside dinners and do the rigor of the analytics, on some of these deals. So you're providing that service for them, which is hugely important. All right, we do need to transition to the turbo round now. So Igor, I'm going to ask you three questions that I ask every guest I have on this show. And I just asked you for a quick, honest answer. Are you ready?

[00:40:27] Igor Shaltanov: Yes,

[00:40:28] Tim Little: All right, let's do it. First one. What is one red flag every investor should look out for?

[00:40:33] Igor Shaltanov: I was always looking at the team, right? The team is actually the team because you know some people connected to the Zoom and you understand they know each other for a couple weeks or a couple months or so and then they will in to bet for the future. They say oh it's gonna work together It's gonna work really well, and then everything will be all right But it's actually not because they're not a team. They just you know group of people who just got together

[00:40:55] Tim Little: Yeah, a bad team can even screw up a good deal. All right. What is a myth about this business that you would like to set straight?

[00:41:03] Igor Shaltanov: passive investing If you into that business, and I'm just, again, I want to repeat that into that, but it's not passive. It's it's a business. It's there's no difference as any other businesses, right? It's a business process. and if you want to be passive, so you got to be investor and you got to be passive investor. So you just need to exchange risk for capital and that's it. And you gotta stay passive, right? But if you go on into that business, for example, you own, some people connect to me, I'm a passive investor, I got 10 single family houses. I was like, wow, that's interesting. tell me more about that. And then, yeah, he was like, yeah, I'm managing myself. I was like, oh, tell me more. and then How much time it takes you, like how many hours per day and then per week. And then, now you can't divide it, divide your income by the time and you're making like 15 per hour.

[00:41:47] Tim Little: Yeah. As someone who has self managed their properties, I can tell you there is not a whole lot that's passive about it. all right. Third question. What does success look like to you?

[00:41:57] Igor Shaltanov: It's a freedom of choice.

[00:41:59] Tim Little: Awesome. Freedom of choice. And so many people take that in different directions, right? Cause it could mean anything. That's a freedom for you to go where you want, do what you want, buy what you want, all that.

[00:42:09] Igor Shaltanov: Yeah. I'm going to fly tomorrow, anywhere I want. So that's a freedom of choice. Do I need to be at work now? Do I want to work? Yes, I do. That's why I'm doing that.

[00:42:17] Tim Little: Exactly. Now, I love it. All right, Igor. hey, this has been awesome. Please tell our listeners how they can get ahold of you. And if there's anything else that you'd like to share with them.

[00:42:25] Igor Shaltanov: there's nothing to share. So again, it was my pleasure, right? To be on the show, on the podcast, but then, they can go to avistafund.com that's our website. So they can download ebook at the winrealestategame.com. Once again, it's a winrealestategame.com. It's going to download ebook, how to win the game of real estate syndication. And then just my email igor@avistafund.com. You can always shoot me an email. I'll get back to you in a couple hours. So team, thank you very much.

[00:42:52] Tim Little: Yeah, and we'll definitely have all that information in the show notes. I appreciate you coming on and I look forward to continuing to see you do big things on your journey to multifamily millions.

[00:43:01] Igor Shaltanov: Thank you very much. I appreciate you guys and team. Thank you for having us. You guys enjoy the day.

[00:43:06] Tim Little: All right, you too.