How to Raise Millions and Scale Real Estate Fast with August Biniaz

The Real Estate Investing Club

Join an active community of RE investors here: [https://linktr.ee/gabepetersen]   0:00 Introduction and Meet August Biniaz  1:28 August’s Journey from Home Building to Private Equity  6:35 Why U.S. Multifamily Investing Beat Canadian Real Estate  10:25 The First Large Development Deal and Raising Capital  13:10 Building a Real Estate Brand That Attracts Investors  18:30 Market Outlook, Interest Rates, and Economic Risks  22:24 Why Multifamily Housing Demand Remains Strong  26:35 Education, Mindset, and Avoiding Shiny Object Syndrome  32:05 Finding Multifamily Deals Through Broker Relationships  36:22 Lessons Learned from Walking Away from Deals  39:54 How AI Is Transforming Real Estate Investing  43:20 Connecting with August and Final Takeaways   WELCOME BACK TO THE REAL ESTATE INVESTING CLUB PODCAST! 🎙️   In this episode, I sit down with August Biniaz of CPI Capital, a multifamily investing and built-to-rent specialist with more than $225 million in real estate assets under management. If you've ever wondered how experienced real estate investors raise private capital, scale into larger deals, and build lasting wealth through commercial real estate investing, this conversation is packed with actionable insights. 🚀   August shares his journey from growing up in a real estate-focused family and building custom homes in Canada to becoming a successful private equity real estate operator in the United States. Along the way, he reveals how he discovered the power of syndication, multifamily investing, and raising investor capital to acquire larger real estate assets that would have been impossible to purchase alone.  #RealEstateInvesting #MultifamilyInvesting #PassiveIncome #RealEstateSyndication #CommercialRealEstate   Want to learn more about our guest? Connect here: https://cpicapital.com/   Want to learn more about the REI Club Podcast, how to invest with Gabe at Kaizen, or join our community of active real estate investors on Skool? Visit the podcast website at https://www.therealestateinvestingclub.com or click here: https://linktr.ee/gabepetersen

Transcript

00:03all right we are back with another episode of the real estate investing club i hope you guys are

00:08having a great day great week wherever you are and whatever day it is for you as always it is

00:14friday on the podcast we're bringing that good friday energy to you and man it is beautiful here

00:20in tacoma it is nice and sunny all the trees are blooming which is kind of a bummer because my

00:25allergies are absolutely crushing me but i i'm okay with that because it is really really pretty

00:30outside all my trees you guys know i planted them last year and i'm trying to get them to grow

00:35quickly so i went out there and i got them all the food they need and they are i swear

00:40to god i've

00:40already seen them grow so i'm really happy about that but it's a good day for a second reason because

00:45we have august vineyards with us on the show from cpi capital they are multifamily and built to rent

00:52professionals they have 225 million in their portfolio and august is a pro for all you guys

00:57out there who want to start an equity company an equity firm you guys want to go out there you

01:02want

01:02to buy big deals and you want to take other people's capital and use that to buy those deals

01:06this is the guy to talk to august i'm excited to jump into this thanks for hopping on thanks for

01:12having me looking forward to add value to your audience and discuss the topics you just mentioned

01:16right on i uh told you before we got on here we always like to start with stories we like

01:21to hear

01:22how people got to where they are so why don't you take us to the beginning of your story in

01:25real estate

01:25and just tell us how you got here yeah taking a step back um i come from somewhat of a

01:31real estate family

01:33my mother was always investing in real estate and was always involved in it my maternal grandfather was

01:41a broker he owned his own brokerage so if real estate was a language i somewhat understood it

01:46so it was just a natural um evolution for me to get involved in in real estate in some capacity

01:52and

01:53in my early 20s i got my real estate license and uh soon after that i realized that i didn't

01:59really

01:59see myself uh you know having being a broker as a career but being having my license it got me

02:05allowed

02:05me to have access to a lot of potential deals particularly fix and flips so i started doing small fix

02:10and

02:10flips and that was very profitable soon after i started my own general contracting company i started

02:15building single family homes ground up development single family homes and i was doing both spec homes

02:21and custom homes and to differentiate between the two a spec home is when you build a house and you

02:27put

02:27it on the market to sell for profit either with your own money or with investor capital so it's a

02:32for

02:32profit type of business other the other side is custom home is when you're building a home for a client

02:39a client hires you to build them a home to their specification so you're not making any profits on the

02:43upside

02:43you're charging a fee to do so so i was doing both of that for close to a decade i

02:48always wanted to

02:49scale always wanted to do bigger projects vancouver where i'm from a couple hours north of you

02:54originally now i'm in southwest florida but um vancouver had gone through a real estate boom

03:00particularly uh with a lot of chinese moving to vancouver and toronto real estate prices had gone up

03:06from the late uh 90s to the early 2000s um 2000 maybe 2000 uh pre gfc real estate price that

03:14had

03:15gone up 500 it was definitely a boom in the car market as well oh yeah 500 that's right yes

03:21that's crazy um yeah those dates might be might be it might have been a bit after gfc so maybe

03:262000

03:27in the 2000 teens uh but yeah uh the real estate had done uh tremendously well and there was a

03:33lot of

03:34infrastructure being built a lot of high rises in downtown vancouver i always wondered how those

03:39projects are built because if you're trying to build a single family home in most cases you need

03:44at least 30 percent of the total cost right so that's 30 percent of the land 30 percent of the

03:48construction mortgage laws are a bit more restrictive in canada so um so i'm like if these guys are

03:54building a 200 million dollar project they're gonna need at least 50 million dollar cash liquid so it was

03:59just such an unattainable uh venture i i went down and that's where i wanted to be right i wanted

04:05to

04:05do that and another thing i saw in vancouver vancouver is a very multicultural city a lot of italians had

04:10come to vancouver post world war ii and they were involved in construction and now their grandkids were

04:16involved in building these high rises so i wanted to expedite the process that it doesn't have to be my

04:21grandkids building high rises one day after one their grandfather had done i wanted to be able to do it

04:25myself so i went down this journey of finding out how capital is raised how capital is formed this

04:31concept of syndications funds limited partners general partners the compliance side of it and

04:38realized there was a whole new world out there that most of these deals large deals even companies that

04:43were transacted were done through uh this thing called private equity raising capital outside of the

04:49wall street route so i really fell in love with the model read a bunch of books i listened to

04:53a lot of

04:54podcasts and so on and but as i was doing that i realized that a lot of groups utilizing the

05:00syndication model in the u.s were acquiring multi-family and and utilizing the value-add business

05:06model and what that really means is you buy apartment community in the sunbelt in those growth markets where

05:12you don't have the concerns about colder climate areas where there is snow removal boilers pipes breaking

05:20and so on um a lot easier with these garden style two three levels so i noticed that the groups

05:25are

05:25acquiring these properties doing some lipstick renovation just upgrading the paint maybe appliances

05:31maybe the flooring putting in washer dryers and they were able to be very profitable and return great

05:37returns to their investors so not only i realized about the world of private equity but also the fact

05:43that there was this business model in the u.s that was much superior to to the business model in

05:48canada multi-family value add is not really possible in canada not because only the climate issues but

05:53also because restrictive rent control laws all across canada alberta is one of the only provinces

05:58that doesn't have rent control laws but there's also not a lot of volume of deals taking place so a

06:03lot

06:03of investors who have own multi-family they're not selling them so the volume is just not there

06:08so that was really the impetus for me to look cross-border at the u.s i partnered with a

06:13couple of great

06:14partners and started cpi capital with our mandate to um have allow canadian investors to have exposure

06:21to u.s multi-family nice man i love it it's very i mean you you've gone all over the

06:27board when it

06:28comes to your career and i love seeing that because it means you have a very broad experience to pull

06:32from so it's not just multi-family i mean you guys have been building you've done fix and flips

06:36single family you name it it sounds like you've been there raising capital really is the thing that

06:42it's not really just raising capital but financing a deal getting a deal purchased is the thing that

06:48scares most people about real estate they want to get into it they want to figure out how to do

06:52it but

06:53they look at these purchase prices like you said you know 10 million dollars and they think i could

06:58never buy that there's there's no way that i could ever come up with the money to buy that

07:02so they don't go forward i've even had coaching clients who want to do you know even a million dollar

07:07deal and they're like i can't afford that so i'm not even going to try i'm not even going to

07:10reach out

07:11it is something that people need to get over and so take us through that i want to kind of

07:16focus in

07:16on that experience for you that kind of light bulb moment that you had where you can raise capital you

07:21can finance deals with other people's money and then what were the steps that you took once you kind

07:27of you know figured out how the process worked what were the first steps you took in order to get

07:32it

07:32get the ball rolling yeah my experience with raising capital i mean as a single family spec builder i was

07:39limited to the amount of capital that myself my mom was my first investor and then a few business

07:45partners very close business partners here and there that i partnered with never understood that

07:49could go outside of that and market to the members of the public and raise capital even in some cases

07:53some institutional capital partners that we currently have but i was really thrown into it so as a

07:59single family home builder and kind of the later on in my tenor a deal had come across my desk

08:06where

08:06somebody had bought five single family homes it was something called the land assembly

08:11where their plan was to go to the city rezone the property and build tony townhomes

08:18and official community plan for the city allowed for that property to be rezoned so he had put it

08:24under contract he had put a 250 000 deposit another 250 000 deposit was due he had a 12 month

08:31closing

08:31but now he had three months to close he had come to some financial hard time and couldn't come up

08:36with a

08:36second 250 but the property had gained some value in that time so he was just looking to flip the

08:42contract and walk away from the deal and at least get his 250 back so um the deal was outside

08:50of of

08:50course my personal capacity to acquire it it was a deal that was multifamily i'd never built multifamily

08:56before this is approximately 2019 and but it was a deal we were making money on the buy and i

09:02knew

09:02the market i understood what what was going to be built there i had built single family for 10 years

09:07by that time so i took over the deal and signed it over without having and it was an 8

09:11.7 million

09:12dollar purchase price for those five single family homes and we i took that deal to a few of my

09:19business

09:20associates that have done deals in the past and showcased to them that hey we're making money on

09:24the buy we should go ahead and acquire this deal and they were in a financial situation that they could

09:29easily bring on the investment to do so and my partners agreed upon to do that i had no idea

09:35about the gplp structure so we just formed a corporation uh within the corporation um we had

09:42shares pro rata relative to how much capital each of us put put in i had put some amount as

09:46well but

09:47much smaller percentage than any of my other partners and then i said that for bringing on the deal

09:51and also sitting on the board investing in the deal as well above and beyond my pro rata share of

09:58the

09:58profits on what i've already invested in cash i also want a finder's fee and an advising fee so

10:04they agreed that when the project is built and sold they would give me a percentage of the upside and

10:09i'm doing all of this without having any experience in private equity and we agreed upon that purchased

10:15the deal uh we had to end up putting up around four million dollars to uh buy that 8.7

10:20million dollar

10:20piece of property went through the process of rezoning got a construction loan and start building the

10:26project believe it or not the project is almost complete now the 20 unit townhouse project is

10:31called onward in the city of richmond british columbia most of the i think 80 percent of the

10:35units are sold now but and that tells you about how long it takes to build things in vancouver and

10:39why

10:39i'm in the u.s that was years ago that's crazy yes so but we were building equity in the

10:45process as

10:45well so it wasn't all bad but that was that was my first start so it wasn't only in the

10:50world of

10:50raising capital but it was in the world of finding a deal putting it together bringing it on to the

10:56partners bringing the gc bringing the architect so i fell in love with that model at around the same

11:02time as well and over the 10 years what i'd learned with my home building company white rhino developments

11:09which is no longer in business when i did start cpi with a couple of great partners my recommendation

11:16early on was we need to put a focus on raising capital that's got to be our utmost focus because

11:22you can we can always bring on a gc we can always bring on talent but you can never bring

11:26somebody to

11:27go out there and raise you 20 million dollars it just doesn't exist there is a cost associated with

11:32raising capital fair enough but you need you need that internal infrastructure to do so so we put a lot

11:37of focus there and early on we realized we really were learning on the job so again read a lot

11:42of books

11:43attend a lot of conferences listen to a lot of podcasts but we knew early on that the most important

11:47part is building a brand around ourselves and around our company so we went on that pursuit of

11:53doing so and since they that day i mean we've done tremendously well when it comes to marketing

11:57i've raised tens of millions of dollars even if you ask chat gpt or other ai platforms about what are

12:03the top five companies that allow canadians to do cross-border syndication cpi comes up so the

12:09algorithms are definitely picking it up but yeah we i mean never turned off the spigot for capital

12:15raising even from 2022 to 2024 where we were somewhat sitting on the sideline when the fed was going on

12:20a

12:20tightening cycle and the fed's fund rate going from zero to 0.25 all the way up to 5.25

12:2711 consecutive

12:28increases at their meetings and in a couple of pauses and increases again we we really sat on the

12:33sideline so but we still talk to investors we marketed ourselves we still had live webinars we were still

12:38adding value to our audience sending our weekly email every sunday at 6 a.m so that nurture process

12:44so our if you look at our investor journey is you somehow create the lead if it's through paid ads

12:50if it's through linkedin if it's through in-person events if it's through live webinars if it's through

12:54friends and family but that lead comes in somehow that lead has to get qualified so we have to find

13:00out initially if they're accredited if they're not if they're not accredited they go down a different

13:03journey if they are accredited then our appointment setter as we call them try to get get in contact

13:08with them make sure the phone number is correct make sure the person is the right person make sure

13:11they're accredited make sure they have liquidity and then they book a call with one of our closers

13:15who is more usually an executive within the team and that executive has more of an intimate call with

13:20them it gets to know them on a personal level writes on detailed notes about their conversation

13:25on our crm if somebody's son was graduating they write those notes the next time they talk to them

13:30say hey how's your son doing in college for example and then now as syndicators we might not always

13:35have deals because we don't utilize a fund model where we're always raising and and within this

13:40basket we have all these different deals that investors have exposure to but we do syndication

13:45every time we have a deal we package it up and take it to our investors so there are times

13:49when we don't

13:50have deals so that nurture process is extremely important so hosting these webinars that we educational

13:55webinars for our investors our podcast dinner events for our investors phone calls checking in text

14:01messages sending our weekly email every sunday so that's how you nurture so when you do have a deal

14:06every cent ever since we've had a deal since 2024 when we came back into the market june 2024 we've

14:11oversubscribed on every single one of our deals so that's a high level about how you go about with

14:17investor relations and building that infrastructure nice i like it and yeah i feel like the the important

14:22i mean it was all really good information the things that i'm just trying to put on the cap of

14:27somebody who wants to do this they have no idea how to do this and they're trying to look at

14:31the

14:31first steps i mean the thing that kind of jumped out to me from your story from what you said

14:35is

14:35you need to build a brand and you need to have a nurture process a lot of people when they

14:39hear

14:39build a brand their their brain kind of shuts off they're like this is what big corporations do it's

14:44not for me i don't know how to do it but it really isn't that hard and it's it's more

14:49build a

14:49brand sounds more complicated than it really is it's really just you putting yourself out there

14:53telling people what you're doing and then building that confidence that trust over time so they get

14:58multiple points of exposure to you what was the the steps that you took when you thought okay i need

15:03to build a brand i need to have recognition what were the things that you did to put yourself out

15:08there yeah it's really you have imposter syndrome initially getting into a space where it's ivy league

15:14school graduates where people have been in finance for decades when they're coming and starting a firm

15:19you're talking about multi-billion dollar trillion dollar firms that are there your competition so it

15:24gives you that definitely that imposter syndrome initially you need to leverage your own experience

15:28what you've done in the past and bring that to the forefront if it was me building homes for a

15:32decade if it was my other partner who was a real estate agent and top performer for a decade if

15:37it

15:37was my other partner who was a civil engineer had built multi-billion dollar bridge projects

15:41bring that experience into the forefront and really immerse yourself in the business be out there gain

15:46information take that information and give it back to your audience don't be shy of creating

15:50content be a very active on linkedin discussing very anything you've learned in life or business

15:55create a media kit around yourself go on podcast if you can create start your own podcast an average

16:01lifespan of a podcast is 42 episodes most people quit so you have to be resilient we've held our podcast

16:07now for six years i've spoken to interviewed over 350 expert guests go to conferences share share

16:15information with others join masterminds and today there are many masterminds for buying apartments

16:21for raising capital even if some of them are fluff at least you can meet potential right team members

16:27within those masterminds to build something great so yeah all of those items uh could definitely be

16:32helpful in in your journey to build a brand around yourself but yeah i mean a company wise these days

16:37with fiber and upwork there are great contractors around the world that will work for you for pennies on the

16:43dollar and you can find the strategic guys and pay them a big bucks here in america or let's say

16:48canada but then the people doing the the more laborious tasks they can be outsourced to your

16:54architect who can be from here your workers can be from around the world and it's so easy to have

16:59somebody running your marketing campaign and and if you don't feel right comfortable marketing i don't

17:04think private equity is the right business model for you because you are raising people's money at some

17:09point you will be questioned and you have to be going in front of your investors in some cases

17:12hundreds of people and tell them about what's going wrong with the deal or what's going wrong

17:16with the economy what's going wrong with your initial forecast and beliefs you had on a deal so

17:20if you're comfortable doing that and raising money from people you should be comfortable enough to go

17:24and represent your company online yeah yeah i like that you said that because it does you do need

17:29to be honest with yourself if if it is the right fit for you if you are taking other people's

17:34money is

17:34a huge responsibility i it's even i have more stress about other people's money than i do my own

17:40and so you really do need to want that process and and know that it's a right fit for you

17:46so with that

17:47i i checked the clock it looks like we have run it down before we move on though i do

17:51want to ask

17:52about what your crystal ball shows you the economy right now lots of stuff going on we have the iran

17:57war we got gas prices going up going down going sideways tell us what you see for the future in

18:02terms of real estate for the next you know i guess we can't say five years but the next six

18:06months

18:07to a year yeah i mean i'm a i'm a fund manager i'm a general partner i'm a real estate

18:14maximalist

18:16in most cases and i deal with investors so i'm always supposed to be bullish on my own asset class

18:22but currently we're in a difficult time when it comes to the economy we have you know and this is

18:27prior to the iran war but we had the new invention of ai which resulted in potential of many job

18:34losses

18:34in the workforce space where we cater to for our for our tenants in our communities both on our

18:40multi-family side and build to rent side so you know you have the the interest rates which are high

18:46you had the fed possibly discussing increasing rates at their next meeting because inflation is

18:52looking like it's coming back and it's it's trickling up so and then compound all of that with

18:57a more war in the middle east with the iranians controlling the strait of hormuz where 20 percent of

19:02the world's oil passes through 15 percent of the world's aluminum passes through and one third of

19:07world's fertilizer passes through it's scary stuff i mean at any moment one of either side could

19:12take a step that results in us being in a cataclysmic war potentially for russia or china

19:18getting involved there was a few planes that china was landing in iran today that i that i saw in

19:24wall street journal that could potentially be bringing weapons to iran even though they promised

19:28america you know promised americans that they wouldn't do that so very fragile times if trump

19:33is a businessman at heart he will try to make a deal with them hopefully over the next few weeks

19:38here and things will simmer down he took out you know very i'm originally from iran so i was very

19:43glad to see americans and israelis take out the quote-unquote supreme leader being replaced now with

19:49little khamenei so but that that's sad to see but again you're hoping that that at least the iranian

19:55people will have some level of freedom and you hope then that they don't keep getting bombed either

19:59civilians uh but yeah very fragile time for the economy uh real estate as well real estate is very

20:04uh sensitive to interest rates particularly commercial real estate because most commercial

20:09loans are um indexed off the 10-year treasury which is an organic um rate that the markets control

20:17so we go get a construction loan they're going to give us 350 basis points above the 10-year so

20:23that's

20:23the rate we get so if the 10-year goes up uh we pay more and the 10-year went

20:27up uh 30 or 40 percent

20:29uh it has been volatile over the last few weeks so imagine what that does to the power the purchasing

20:36power for an investment firm like us so yeah i would be now having said all the negative aspects of

20:41it

20:42and the more you know the concern size of it the more bearish side i gotta also say that when

20:47you're

20:47talking about u.s multi-family when you're talking about built to rent which falls under the same

20:51category you have over one-third of americans that are renter renters that's 340 million people

20:58population and one-third of americans are renters and over 10 percent of americans live in apartment

21:03communities townhomes and btr falls under the same category as well it's measured under the same thing

21:08so you have close to 40 million americans that live in apartment communities and that number has been

21:13growing since world war ii continuously and people's ability to purchase their primary resident has

21:19participatory coming down since world war ii so america is becoming more and more of a renter's

21:25nation and when you when you talk about somebody having a place to sleep and a roof over their head

21:29technology doesn't move as fast as you know in the pace that it does with other aspects like

21:35smartphones or ai people still need a place to live a roof over their head so that need exists here

21:41in

21:42the u.s now there might be some technological advancements where structural where homes can be

21:46built at a faster pace but i think we're still decades away from that i think there's companies

21:51like boxable that are building these container size homes where you can get a crane and open it up and

21:56it turns into a home but we're still decades away from technology coming there so i still think the

22:02need is there even on that side i bet we actually had the um founder of boxable on the show

22:07and uh and i

22:08mobile home parks that's what i buy that's my my bread and butter and even on even if you can

22:13have a you know a house that can be manufactured and you can just pop it up on site there's

22:20still

22:20city zoning laws there's still all the headaches that you have to jump through in order to get

22:24approval to put the thing on a piece of land and so i don't see people always say you know

22:29the

22:30improvements in the ability to build structures build multi-family units is going to drive down

22:35the prices to where real estate doesn't make sense to well i've heard this argument real estate doesn't

22:39make sense to invest in and i'm just like no way that's not happening it's just there's way too

22:44many obstacles and it's it's not just just uh construction construction cost is a big thing

22:49but it's not that's not the only obstacle to uh to putting it up and getting people in it so

22:54i'm

22:55yes didn't mean to jump in there but that's uh i heard that and it was interesting no definitely

22:59thank you for that one last point i want to make is also about america itself about the united states

23:04and

23:05my belief in it my you know i was originally from iran moved to canada as as a young child

23:12lived there most of my life but i always felt american at heart both of my sons are born in

23:16america so and that's not just me alone you can see a brain drain direction from around the world

23:22ending up here in the u.s people are not moving to china or or russia or middle east people

23:28are not

23:28some some crypto guy bros might be moving to dubai but this is where people end up this is where

23:33the

23:33elon musks of the world this is where the nvidia's founders of the world this is where they end up

23:38this is where the great minds come or the ceo of uber who is iranian whose family fled iran and

23:44post-revolution so believe in that as well because as people you know somebody in africa or somebody in

23:49asia or other places of the world as soon as they make you know or south america latin america as

23:54soon as they make a reasonable amount of money they know that this is the place they need to come

23:57and

23:58this is where you know i don't want to sound like a uh crazy american but this is this is

24:03the this is

24:03the greatest place that the marketing for the u.s and what is achieved is the greatest thing ever and

24:08even even you see in conflicts like the jews and the arabs have been going at each other forever but

24:14in the u.s you never hear about them shooting at each other you never hear about them having

24:18conflicts they actually get along pretty well here so it it's it's the greatest place on earth

24:23and uh excited to be here and be part of it so that's another factor as well because you're

24:28going to have that immigration coming here which immigration again drives need for housing so that

24:32was my point about the housing needs that exist so foundational needs exist but currently we are

24:38going through some headwinds when it comes to real estate yeah absolutely all right with that i'm

24:44going to push us on to the quick question round you ready let's do it let's do it starts with

24:49education could be any form could be a book you've read movie you've seen conference you've

24:52been to mentorship program you've been a part of anything like that i just need two recommendations

24:56one for general life wisdom and then one for real estate or business great so i mean uh maybe this

25:02more of a story so i've always been jealous of people that had gone to ivy league schools i never

25:07got a chance to do that but i applied to harvard um a business school for their venture capital and

25:14private equity program and i was accepted into it and it was a seven-day program where you stay and

25:19live

25:19on site so it was a great experience going there there was 70 other individuals from around the

25:24world so i was surrounded by the greatest minds really in the space and got to rub shoulders with

25:29them and become a harvard business school alum so if there are such programs out there that you could

25:34you could go on to and get a chance to be accepted i really recommend it and today i mean

25:39with so much

25:40content online with so much education i'm i mean ai is my best friend i'm on there you know debating

25:45my

25:45wife and my friends about every different topic and sometimes i'm wrong but there should be no excuse

25:50for learning another thing is really that has educated me over the years is being on twitter

25:56formerly twitter currently x i learned so much about life and different historical events and some things

26:02that were not true and just phrases people use you know years back i heard people say oh that country

26:06is orwellian i'm like orwellian what's orwellian so i go google orwellian hear about george orwell 1984

26:13and go down that rabbit hole reading that book so there's so much knowledge to be gained at some

26:18point you also realize that when you do gain knowledge you realize how much you don't know

26:22so it gives you a humbling experience but these days i don't think a certain book or certain literature

26:28will change your life but the opportunity to be a excited and be enthusiastic about gaining knowledge

26:33for yourself for your kids for people around you and to to really live a better life that's that's

26:38definitely my recommendation nice i like it all right next question is for your younger self

26:44let's go back to the august who was just starting out so many years ago back in canada let's say

26:50he

26:50was just doing i think you said you you started out as a broker so go back to that version

26:54of august

26:55look him in the face and give him one piece of advice moving forward oh it's hard to give one

27:00it's hard to give one i have to give him a couple advices a shiny object syndrome that's a big

27:04one to

27:04stay focused and master a craft quickly on the home building side i would ask him implore him

27:10never to build custom homes for clients it's the worst job in the world uh applaud every builder out

27:16there that builds for clients only build spec homes you make 10x the money and 100x less headache

27:23and uh on the other side i said get involved in private equity sooner this is the world to be

27:27in

27:27uh blackstone started started out as a leveraged buyout shop buying companies and taking a public or

27:33taking them off the stock market you know a decade later they had a higher allocation to real estate

27:38that they did to um private equities um the sky's limit now they have over a trillion dollars of

27:44assets under management uh it's the greatest business to be in because there's no ceiling you

27:48you can as long as you do a good job on acquiring deals and managing them well and exiting the

27:53right

27:53way there is no there is no ceiling you can you know be a trillion dollar company wow i didn't

27:59know

27:59they had over a trillion dollars in real estate assets under management no not in real estate

28:03their total AUM is is originally yeah yeah still even 50 of that that's 500 billion that would be

28:08that's pretty great well today they have a higher allocation to private credit private credit is this

28:14new asset class that lends to companies yeah it's it's like a quasi uh vc but rather than being vc

28:22they

28:22source companies that are cash flowing that are in need of funding so they come in and they lend money

28:27to them so private credit if you google it these days you'll see that it's having some trouble because

28:32there was just so much money raised for private credit so today they have a higher allocation to

28:35private credit than both private equity and real estate huh that's interesting i like how you said

28:40shiny object syndrome that's something that you know especially in real estate it's just so easy to get

28:44caught up into it i i struggled with that myself there's so many different ways to do real estate so

28:49many different asset classes to get into but really like you said if you want to see results you need

28:55to focus in focus on one area one asset class get really really good at it and then you'll start

29:01to

29:01see the results you want if you jump from thing to thing to thing you're gonna you're just gonna keep

29:06spinning your wheels i did that and too long and i also wish that i would have just stuck with

29:10mobile

29:11home parks rv parks and just uh you know went down that route instead of buying everything yeah one

29:16quick comment on that one quick comment on that because if you don't want to kind of unmotivate yourself

29:21and feel like you are missing out tell this to yourself whatever asset class you're focused on

29:25if it's mobile home parks become great at it and become extremely successful to a point that you

29:31build something so great that you can build another asset class in parallel to that but until you haven't

29:36achieved that stay focused and keep at it so don't get too excited and don't get cute yeah yeah absolutely

29:42all right next question is about finding deals it all starts with getting in contact with the seller

29:47and pending that purchase agreement so what is your favorite way to generate leads

29:51and find new deals on the in the multi-family front a good friend of the show a guy named

29:57bo berry who's

29:58a broker in northern florida has actually written a book on multi-family about the investors who are

30:03the most successful in multi-family he's done market research in northern florida and realized that

30:09and 92 and a half percent of deals in the multi-family space are traded through through brokers

30:16they're they're listed deals they're on market deals so 92 and a half percent

30:20and the seven and a half percent that are off market there was a broker involved in some capacity

30:26in some stage so after reading that book and having a conversation with him and being in the space

30:33myself particularly multi-family value at space in institutional 100 plus door under 50 million the

30:40middle market this idea of off market is a unicorn to go and put resources in your time to go

30:46and find

30:47off market because keep in mind there are brokers who have mbas whose whole life is to find ways to

30:54find these off market deals and promise the world to the seller you think you're going to do a better

30:59job than them you think you're going to do a job better than anybody else involved in that in that

31:03multi-family value at space to source deals to put your attention and focus and resources as a small

31:08guy one one man show or smaller firm if you put that time time and focus and and energy in

31:15in

31:15whining and dining brokers and learning about them in their in in the market that'll increase your

31:21chance much more of getting a deal than to go and try to find an off market deal does it

31:26happen of

31:26course it happens do people leverage it and market it more than it needs to be for sure yeah i

31:32i would

31:32like to put a caveat on that first that well brokers obviously are absolutely fantastic like you said

31:37they're out there they're pounding the pavement they're they're finding deals and so you might

31:40as well just build relationships with them however that 92.5 um statistic that you said i am i'm sure

31:46that is only for large deals large deals 100 plus doors yes those absolutely only go through brokers

31:53but if you guys are starting out and you're and you want to find a good deal off market deals

31:57are

31:58there's plenty of them on the smaller end of the scale you know three million under you're going to be

32:03able to find plenty of good deals off market in fact most of the best deals that i've found

32:07have been off market but if you want the big deals absolutely go for brokers i just don't want

32:11to dissuade people from reaching out finding some good deals on their own because there are really

32:15good deals on the lower end of the scale for for pretty much any asset class out there 100 and

32:20that

32:21story i shared about that 8.7 million dollar deal was an off market deal yeah remember my my start

32:26into the space so yeah it definitely does happen even it's happened to me uh and and on the smaller

32:30scale side 100 uh but yes but yeah the big deals the brokers they've already they're already out

32:37there they have the relationships with these guys for 10 years already they've been calling them every

32:40single month you're not going to be able to beat them on that all right that leads us to the

32:44next

32:45question this is about the u.s it's a big place there is a lot of opportunity out there give

32:49me the

32:50single metro you're most excited about investing in today oh and you do that to me because we we have

32:55we have really two focus markets both texas and florida in florida we love tampa tampa bay is our

33:02number one i just feel but so much tampa has to offer city of 3.2 million people work-life

33:08balance

33:09retirees moving there young people moving their infrastructure going up it's just such a beautiful

33:14city prices are very reasonable still but our other market is san antonio city of 2.8 million people

33:21a lot of people moving their beautiful city i love it myself i have projects in both of have assets

33:27in

33:27both of those uh cities and it's it's kind of a sleeper city because when people think about texas

33:32they think about um you know dfw houston and and and austin they they always forget about

33:39san antonio but san antonio is only an hour away from austin so they they say that what happened to

33:43dfw is going to happen to um austin and san antonio yes because that's where the path of progress is

33:50going so it's got to be those two cities in my opinion tampa and san antonio i look forward to

33:54watching this in a couple years and see how i did that's funny i we own in san antonio i

34:00love that

34:00city um so so great suggestion there going on to the next question this is about lessons learned not

34:06every deal we get into goes the way we expect it in fact pretty much every time something goes wrong

34:11and that's when we get to learn a lesson so what was a lesson i want or a deal that

34:15went a little

34:15bit sideways for you and then what was the lesson you pulled from it yeah the lesson we learned in

34:212022 we were looking at a build to rent project in tucson it was a 71 home single family project

34:27that a

34:28merchant builder was building we approached that merchant builder and said instead of selling them

34:32individually we'll come in and buy all the 71 homes from you at a certain video occupancy it was a

34:37great

34:37deal we were buying it for amazing basis but the fed started going on a tightening cycle and the deal

34:43really didn't make sense at some point but by that time i me personally and our executive team

34:48have already invested our own capital up to you know over a hundred thousand dollar actual cash and

34:53of course sweat equity into that deal this is well before any investors got involved or before the

34:59structure had put being put together the entities and what have you so but we had to walk away from

35:03the deal so and then i had a chat with our lawyer who's a seasoned guy and he turned to

35:08me and he said

35:08dugan told me that hey hey august sometimes the best deal you do in real estate is a deal you

35:13walked

35:13away from so that was a big lesson that i learned the other lesson is when the markets are doing

35:18really well we close on a couple of deals and last year a deal came across our desk got overly

35:24excited

35:24start created all the entities this is before going to investors but again that's opportunity cost

35:30getting excited and i did all that upfront cost just to be ahead of the curve uh before we

35:35completed our dd flew in and looked at the property with my with our vp of investments paul hopkins and

35:40realized that there was a lot of hills and valleys in the project which the topographical issue would

35:46be extra cost when it came to drainage and other material so the project no longer was feasible

35:51because of that extra cost just by visiting the property so yeah i mean and great thing about real

35:57estate is you learn lessons on every single deal six years ago i thought i knew everything about

36:01real estate and every day i realized that there's so much more to learn

36:05for sure and yeah that's uh it is so hard to keep your um i guess expectations or your excitement

36:12in check when you're just getting into a deal especially when you've done that first cursory

36:17underwriting you've kind of you got a sense for what the deal is and it seems like a really good

36:21deal

36:22i struggle with this myself my rose-colored glasses go right on and i'm just like oh i'm so excited

36:26for

36:27this and it's really hard to keep your expectations in line and allow and allow for for negative

36:33information to come in because you can't be certain about a deal until you've gone through dd anything

36:39can pop up things always pop up and you need to be ready to take a step back and walk

36:44away from the

36:45deal that's the hardest thing to do walking away from a deal especially when you've been so excited

36:49to close it but you got to do it like you said i can't remember what you said your lawyer

36:52said but

36:52some of the best deals are the ones you walk away from really good advice and uh really hard to

36:58do as

36:58well all right uh that leads us to the second to last question this is a new question we've been

37:02asking um it is about ai you've mentioned you you use it a lot as well it is new and

37:07it's here to stay

37:08it's having a huge impact on every business out there so how are you implementing ai in your business

37:13today yeah so i'll put the focus since this is somewhat rapid fire i'll put the focus on just one

37:19division of the company so our vp of investments paul hopkins he's joined a ai mastermind so every day

37:25he's got something new and um different ai for different not projects but parts of that project

37:32use cases within the project exactly so like claude claude is his number one ai that he uses over

37:39gpt so what he's done is that on the acquisition front that he oversees the way that we go about

37:45acquisitions is we are on our all brokers email list those emails come into our deals at cpicapital.ca

37:52email and historically one of paul's team members goes into that email extracts the deals that match

37:58our buy box which is on the multifamily value add side over 100 doors less than 50 million there's a

38:04value add component it matches what we're looking for and then uploads that to our excel sheet and

38:11then if the deal again makes sense we go through the back of an envelope underwriting you know spending

38:15an hour to see if the deal makes sense on a quick basis and if it does make sense then

38:20it goes into a

38:20full underwriting so that process usually took a long time especially the data entering portion of

38:25it so what paul has done now is that when the email comes in and he's working that the email

38:30automatically

38:31gets aggregated into ai but that step hasn't taken place yet i haven't spoken to him about him yet but

38:36it might have already but what he does is when he uploads the broker om to ai ai extract the

38:44information

38:44automatically and inputs it into our task management software asana and everything is in there so you can go

38:50there and extract extract all the information that he needs and then under underwriting side as well

38:55i think uh you can see information every day that on the excel side that underwriting is coming in ai

39:00is

39:00coming in so he hasn't done that part of it yet but at least just that one step of data

39:06entry making

39:06sure the deal masses is made our acquisition part much more expedited and much more uh you know easier

39:14to do on the marketing side as well i mean we we've implemented ai a lot of our service providers

39:19are implementing ai which makes it our lives a lot easier on that front so marketing creating content

39:24short videos we use opus clips for our podcast so we just upload the video to opus clips and opus

39:30clips

39:31automatically brings in videos puts those writings that come up and does everything for you so and opus

39:37had a partnership with linkedin i'm a linkedin top voice i was invited to a webinar they had and then

39:43they

39:43gave us some free hours or free credits on opus and we kept using it no nice yeah i we

39:49use wizard

39:50for for that step but i've been trying to i'm i'm going to switch to to opus once you know

39:55i bought

39:56like the year subscription to visit so i'm going to switch to opus once we get to that point because

39:59i have heard really good things but awesome claude opus clips so many things that we can implement

40:04in our business that brings us to the very last question this is for the listeners you've given us a

40:10lot

40:10to think about i'm sure people want to reach out get in contact with you this is a two-parter

40:14where

40:14can they find you and then what can they expect when they reach out yeah i'm very active personally

40:18on linkedin i'm a linkedin top voice as i've been tooting my own horn here for a bit

40:23so yeah august biniaz on linkedin uh send me a message love to connect if you have some advice

40:28you need to ask from me happy to provide you my brain power the other great places our website i

40:33talked

40:34about our live webinars that we hold educational that can only be found on our website so that's a

40:40great way and you can jump on the website and find about creative ways that we utilize to get people's

40:45email addresses and qualify potential investors so by signing up to get access to our live webinars

40:50with our expert guest speakers that have you brought on we take your email so you become part of our

40:55database and then we have our underwriting model that paul and his team have put up on our website so

41:00you cannot download the back of the envelope underwriting model that helps you quickly

41:03underwrite multi-family deals that's there available as well for you awesome i'll put all

41:08that in the show notes so if you guys want to reach out to august and his team all you

41:11got to do is click

41:12the little more in the description it'll pull down that full description and in there you can find his

41:17links perfect thank you that uh wraps it up august thank you very much for hopping on the show

41:23and for everybody who's with us today thank you guys for showing up you are the reason we do this

41:28so

41:28if you guys have any questions reach out to me at gabe at the realestateinvestingclub.com

41:32if you guys want to support the show just leave us a comment review anything like that other than

41:37that i hope you guys have a great week keep rocking real estate and i look forward to seeing you

41:42on the

41:42next episode

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