Isaac Chiang is the founder of The Jackson Property Holdings LLC, which conducts value-add, tenancy stabilization, and value preservation for multifamily apartments. In this episode, he shares how he built and sold a semiconductor sales company in Dubai before becoming a New York-based real estate investor, his rationale behind shifting asset classes in order to support his retirement goal, and why he’s on the hunt for a unicorn for his next deal.
Isaac Chiang | Real Estate Background
- Founder of The Jackson Property Holdings LLC, which conducts value-add, tenancy stabilization, and value preservation for multifamily apartments.
- Portfolio:
- 200 multifamily apartment units
- Based in: New York City, NY
- Say hi to him at:
- Best Ever Book: The Go-Giver by Bob Burg
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TRANSCRIPT
Slocomb Reed: Best Ever listeners, welcome to the best real estate investing advice ever show. I'm Slocomb Reed, I'm here with Isaac Chiang. Isaac is joining us from New York City. He is an investor at the Jackson Property Holdings LLC. Current real estate portfolio consists of 200 multifamily apartment units. Isaac, can you tell us a little bit more about your background and what you're currently focused on?
Isaac Chiang: Yeah, sure. Well, I started with -- I owned an IT company in Dubai. I lived there for seven years. It was semiconductor sales, and in 2008, when the Lehman Brothers crisis, I sold all my equity in the company and then took the money to come back to New York, and then that's how I use the money as the seed money to grow the multifamily business.
Slocomb Reed: 2008 was a really interesting time to start buying multifamily, I bet.
Isaac Chiang: Yeah. I had to get educated, because I was trading apartments in Dubai, but we also own in New York City - my family owns two triplexes. But because of the law, I was eagerly wanting to leave New York and invest in somewhere else. And you had to learn how to manage multifamily. So I took a course with Chris [00:02:34.20] He was my first mentor. And that's how I grew from two units, traded to 7, 23, 36, and all the way to 100 and up.
Slocomb Reed: That's awesome. You have a companion with you here for the podcast, for anyone who's watching on YouTube, and you and I were just talking about a mutual friend beforehand... Are you still primarily focused on multifamily investing, or has your investing shifted?
Isaac Chiang: Well, it has shifted. My goal is very simple. I'm looking to retire and retire my family. That is the only goal. I'm not looking to conquer the world, I'm not looking to be Gingis Khan. So I started [unintelligible 00:03:14.16] around 2008, and then my first property was 2012. And I kept buying in 2014, '15, '17, all the way to '19. Then I stopped, because I anticipated there's gonna be a downturn sometime, but it didn't. But now it's that first inning in terms of the downturn.
So what happened was [unintelligible 00:03:37.02] so I'm looking to pivot into a strip mall; actually, a supermarket, or a Dollar Store... Anchored strip malls, and with stores that's necessity in life, like the nail salons, the pizza store... The stores that cannot be replaced by Amazon. So that's, I think, where the value is; that's where you can find the 8 or 10 cap, and you win in the buy. That's basically it.
Actually, today I'm celebrating, I just got my rate lock. Ash has advised me, and I'm pulling a couple million dollars out and sitting on the side, just waiting to see what's going to happen in the market and to our strip mall.
Slocomb Reed: Isaac, a couple of points I'd like to tie in here first... Ash Patel, our mutual friend, is also a host on this podcast. He also, within Best Ever, hosts the Beyond Multifamily Show, which it sounds like is where Isaac is headed with his investing. The companion he has with him, for those of you who are not watching, just listening, is a unicorn stuffed animal, because Isaac was explaining to me before the episode that he's looking for unicorns. I want to ask you about that in a moment. But first, you just got your rate locks; you're cashing out of your multifamily investments right now, to make sure you have dry powder for these commercial strip center deals that you're hunting for.
Isaac Chiang: Correct. Yeah, I understand the rate is going up, and I started a little bit early, and it took about two, two and a half months to get these rate locks, because the banks - they have changed; the world has changed. They're extremely stringent. And I was able to get the rate lock as 6%, which is about 1.5%, higher, but cash is king. You've got to have the money on the side to do the deals when the market is going down.
Slocomb Reed: Isaac, given the growth in your apartment portfolio over time, and the level of expertise, the level of knowledge, experience that you've gained, investing in apartments over the last 10 years, why not continue to scale in apartments? Why move into an asset class that you do not know as well at this point in your investing career?
Isaac Chiang: Slocomb, that's a great question. My wife asked me that all the time. That's the thing, right? It's like, a lot of people say "Why don't you buy in New York? Why don't you buy in Hawaii?" So I sell my property, and then 1031 into a building in New York City... Yeah, I can buy high and sell higher. But I'm looking for a baby here. I'm looking for a baby.
Slocomb Reed: For a unicorn.
Isaac Chiang: Right.
Slocomb Reed: Why do you need to look for a unicorn, instead of buying more apartments?
Isaac Chiang: The risk is higher. Like I said before, I'm only looking to retire. I'm not looking to conquer the world. I don't need a thousand units under my belt. A lot of people say "I have 1000 units under my belt", but they only own 5% of it. I own 90% of my whole portfolio. I have one partner, a high school buddy, and he just let me run the show. So my goal is very simple - take the value when they present to yourself, and then build it, and then at the right time, you can pivot. [unintelligible 00:07:08.17] we have two asset classes: a strip mall, multifamily, I can 1031 or refi and buy the other asset class. Give me more avenues. So my way is a little bit different from other people. I just think you syndicate, you're getting bigger deals... Yeah, a lot of very experienced operators, they could still do the business, but I'm looking for that huge upside. By the way, I'm celebrating. Today's my rate lock.
Slocomb Reed: Your rate lock day
Isaac Chiang: Yeah.
Slocomb Reed: Yes.
Isaac Chiang: It was hard, man.
Slocomb Reed: I believe it. Isaac, you're clearly an entrepreneur... Maybe not started, but built a semiconductor sales company in Dubai, which you then sold to move to New York and get into real estate investing, starting with residential multifamily. It sounds like the move to retail and strip centers is what is keeping you engaged as an entrepreneur, pursuing those higher returns. Is that a fair way to put it?
Isaac Chiang: Yeah, definitely. And Slocomb, if I could add to that - because actually, I worked for Intel after college. So to make semiconductors is actually my backyard. I like to combine the tech side to the real estate. So the next move - we all know that there's a big semiconductor war there. So now the US government is trying to pull back all the manufacturing back into the United States. And my first option of where to invest would be where the semiconductor fab is going to be built. Where is that? Columbus, Ohio. That's my take, okay? Columbus, Ohio, they're going to build the most advanced fab, hiring a bunch of smart engineers, average income $130,000, in the middle of nowhere. What is the best time to get in there and position yourself right? So that's why I think real estate and the semiconductor technology could play hand in hand.
Break: [00:09:21.25] to [00:11:26.11]
Slocomb Reed: Isaac, let's talk about your expertise there. It has recently been announced by the Biden administration that they want to get more semiconductor manufacturing onshore in the United States. That is, of course, a new industry, there are going to be a lot of high-paying white collar jobs involved; there are likely to also be blue collar jobs involved. Job growth across a lot of sectors; that will be really good. They will be really good for the MSAs that see them. It sounds like while I am in Ohio, and who does not treat Ohio like the middle of nowhere, I am interested to know why you think Columbus is where a lot of that activity will be.
Isaac Chiang: Well, Intel got the subsidy from the Biden administration for $20 billion over the next five years. They need to produce by 2025 X amount of semiconductors. And these semiconductors are no longer working for just computer chips. Because everybody thinks "Oh, Intel - PC." Wrong. These are for aircraft carriers, AI technology, the drones, EV cars, self-driving cars... They are for everything. And that's why Intel is gonna flip the chapter in American history. And the US president is behind it. You can't go against the government's policy. You just have to go with it. The government wants the semiconductor to grow in this country, and we just invest there.
At the same time, of course, you can invest in multifamily in Columbus, Ohio. However, the developers who build the multifamily - they're going to build A class because of the all the costs and everything. So I think with the recession coming, you've got to have a defensive and offensive play, both. So that's why I think a strip mall in Columbus, Ohio, Cincinnati - these are very good areas to be in. Everybody's going to South-East, right? We all know the prices in Florida and Texas, and North Carolina... Go up there. Yeah, you can still get your 7% pref. But when you want to look at infinite return, I think you've got to go in areas where people are not going.
Slocomb Reed: This is gonna be my last attempt to ask this question, Isaac, and then we'll transition the show. You've recognized massive opportunity for a market for Columbus, Ohio, or markets like Columbus, Ohio to take advantage of the current political and economic atmosphere that we find ourselves in. We're talking about job creation, income growth in an already fairly rapidly-growing metro area specific to Columbus. Isaac, that means there's gonna be a strong demand for housing; why not buy more apartments?
Isaac Chiang: I know. You're a big multifamily proponent. I understand. Me and my wife - she always remind me "Don't say just I, you have to say "me and my wife." Okay. Me and my wife, we have 200 units, and we're looking to find values elsewhere. The undervalued properties; yeah, you could do multifamily... There are many ways going to Rome. I just think the potential is much bigger, I think more risk-friendly, and frankly speaking, like Ash said, in a strip mall you have 10 tenants to deal with, instead of 100. You've got 10 stores, right? One anchor store and the rest. So I think I want to choose the easier way, but the better return.
Slocomb Reed: Isaac, I am excited for the things that you have to say about a market that's closer to my heart... And also, thank you for leaving the apartment opportunities on the table in Columbus for investors like me.
Isaac Chiang: [laughs]
Slocomb Reed: Are you ready for the Best Ever lightning round?
Isaac Chiang: Yes, sir.
Slocomb Reed: What is the best ever book you've recently read?
Isaac Chiang: The Go Giver.
Slocomb Reed: Isaac, what is your best ever way to give back?
Isaac Chiang: Currently, I did several speaking in the Chinese community regarding multifamily, because that's my backyard; multifamily, and also commercial investing, and also how to be financially responsible. I don't know if you know, in the Chinese community a lot of people, they have gambling problems; they like to go to casinos. So I kind of help them out that way. So I'm the Treasury in my son's high school, and just help them to be more lean and mean to raise funds for the high school.
Slocomb Reed: Nice. Isaac, thus far in your commercial real estate investing career, what is the biggest mistake you've made and the best ever lesson that resulted from it?
Isaac Chiang: That's painful. I made many mistakes, to be honest with you... But once I invested in a place called Midland, Texas. It's where the fossil fuel are produced... And I did my whole underwriting, and I went there, I looked at the market, and I bought a seven-unit property. That's the beginning of my multifamily career. And the market was awesome. A two-bedroom was renting at $2,250. This is like 10 years ago. And oil was $140. And then oil went to $40. The whole town disappeared. Naturally, my apartment was half vacant. And you don't know when the oil is going to come back, and you have to pay that mortgage. And that was very scary. So never rely on a single industry market.
Slocomb Reed: Never rely on a single industry market. On that note, Isaac, what is your best ever advice?
Isaac Chiang: I think in everything you do, seek mentors, because they are going to save you a lot of time. And you look for mentors that has done it themselves, like Ash, like Jake and Gino... They have done all these great work. Joe Fairless, of course... And just kind of observe them, listen to them... Don't talk back, just learn from them. I think that's very important.
Slocomb Reed: Last question, Isaac - where can our listeners get in touch with you?
Isaac Chiang: I'm on Facebook and LinkedIn. Just type up Isaac Chiang and you will find me there.
Slocomb Reed: Excellent. Those links are included in the show notes as well. Isaac, thank you. Best Ever listeners, thank you as well for tuning in. If you've gained value from this episode, please do subscribe to our show, leave us a five-star review and share this episode with a friend who has the same entrepreneurial itch that Isaac does, so that we can add value to them as well. Thank you, and have a Best Ever day.
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