In 2010, Sharad started looking for a source of passive income. That’s how he bought his first investment property. A couple of years later, he built a real estate portfolio that allowed him to quit his job as an accountant and become a full-time investor.
His business is now 60% wholesale and 40% retail deals. Now that his business is scaled and streamlined, he started looking for new venues. His company, REsimpli, was built to manage various parts of his business. Now creating a one-stop business solution is his main focus. Having a superstar team allows him to run three successful businesses at the same time.
Sharad Mehta Real Estate Background:
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“The goal is always to keep scaling” – Sharad Mehta.
Theo Hicks: Hello, Best Ever listeners, and welcome to the best real estate investing advice ever show. I’m Theo Hicks, and today we’ll be speaking with Sharad Mehta. Sharad, how are you doing today?
Sharad Mehta: I’m doing good, Theo. How are you doing?
Theo Hicks: I am doing great, thanks for asking and thank you for joining me today. A little bit about Sharad’s background – he is the founder and CEO of REsimpli.com, a business in a box for real estate investors. He has ten years of investing experience, and his portfolio consists of 75 units owned 90% free and clear, and he has completed 600 deals in the last ten years. Based in Toronto, Canada. You can say hi to him at REsimpli.com.
Do you mind telling us a little bit more about your background and what you’re focused on today?
Sharad Mehta: Absolutely, man. I started out investing in 2010. That’s when I bought my first property. I used to be an accountant before that. So I was a full-time accountant, and I used to live in Chicago. I started looking at what I wanted to do to generate some passive income, so at that point I started investing in Indiana, which is right outside of Chicago, North-West Indiana… And I started out buying a two-unit property, and then I started getting some decent cashflow, I’m like “Hey, this is great!”, then I bought another three-unit property, and then I left my job to do real estate investing full-time. Then I started buying a bunch of rental properties, and then after that I started doing some wholesaling, fix and flips…
Now we do a lot of fix and flip turnkey properties for out-of-state investors. I would say some properties we have flipped, 60% is turnkey to other investors, and another 40% would be retail flips.
Then I also founded the company Simpli just to manage the different pieces of the business, and then that’s kind of where the software company started, and that’s what my primary focus is right now.
Theo Hicks: Perfect. I’d like to talk a little bit about REsimpli, but – going back to the beginning, you said that you were a full-time accountant, and then you started investing in Indiana, and you had bought a two-unit property and then you bought a three-unit property. You said that after that is when you left your job, after the five units?
Sharad Mehta: Correct.
Theo Hicks: Perfect.
Sharad Mehta: So my wife and I – we’ve always lived on [unintelligible [00:05:31].23] income, so by me giving my job, it wasn’t gonna affect our lifestyle. So by 2010-2011 the market was really low, so I figured the downside wasn’t that bad, but if things worked out, the upside would be amazing. And things kind of worked out.
Theo Hicks: Sure. So you said that when you left your job you were still able to live off of your wife’s income, you said?
Sharad Mehta: Correct.
Theo Hicks: So you have five units, you’ve left your job… What was your main focus at that point? And then how did you fund that main focus?
Sharad Mehta: So my main focus was rental properties, and then I had some money saved up… So again, the area that I invested in at that point – the prices were really low. [unintelligible [00:06:17].11] The two-unit that I bought – it was listed for 65k, and I made an offer for 20k, and I think I bought it for 25k. I put about 10k into, and it was rented for $1,300.
The second property I bought, the three-unit, was 44k. So prices were pretty low, and I had money saved up, so I was buying these cash. And then once I ran out of my cash, I borrowed money from a private lender. With the private lender I had a very aggressive loan, because I wanted to make sure I was putting that pressure on myself to pay them off… So it was a seven-year amortization with a two-year balloon. So all the money that I was making from my rental income, I just basically kept repaying those loans… And I wanted to have a free and clear portfolio, for the most part.
Again, I think what happened in 2007-2009 had a big influence in how I wanted to invest. I didn’t wanna leverage too much. I wanted to make sure I had stable income coming in, that was free and clear. So that’s how I started investing.
Theo Hicks: And then how long did you use this private lender for? Or do you still use that person today to buy your deals?
Sharad Mehta: I don’t use that person now, but I used that person for about 2-3 years, until I got to the point where I had decent rental income coming in, and then at that point I started doing some other things in real estate, like fix and flip, wholesaling, so I had other revenues within real estate.
I borrowed money from that person to fund some flips that we were doing, but not for rental properties. Rental properties now that I buy for myself, I buy them free and clear, without any loans on them.
Theo Hicks: So when did you start the REsimpli business? Maybe walk us through what it is.
Sharad Mehta: So I moved from Chicago to San Diego in 2015, because my wife found a job in San Diego, so I moved to San Diego… And I still had a very active business in Indiana. Once I started looking at all the different software I would need to run my business, and that’s when I decided I would just build something on our own, where if nothing else, we will get the value out of it.
The motivation behind that was we wanted everybody on our team to be on one software, from my acquisition person to my lead manager, to project manager, my bookkeeper… So that’s where the motivation started, and it’s turned into what it is now. Essentially, the goal, the vision with this is to be a one-stop-shop for real estate investors, everything from managing your leads to even doing your accounting, bookkeeping, and everything in between.
Theo Hicks: Is this something that just you and your company are using right now, or have you already started the process of having other investors on the platform? If so, how many people are using the platform right now?
Sharad Mehta: We have opened it up to other investors some time last year, so we have about 400 companies that are using it right now.
Theo Hicks: Nice. Do you wanna walk us through — when you first opened it up to investors, what did you do to find people? Or did you open it up because you already had interest from people that you knew?
Sharad Mehta: I tested in my business for about a year, a year and a half before I started considering letting other people use it. And then how we grew was I’m part of a few different masterminds. Essentially, we’d talk about what I’m doing in my business, and our software is focused very heavily on the KPI parts of it, tracking your data… So as I would share the data, it would pique interest from other people, and at that point we started opening it.
We slowly started developing relationships with other affiliates that are helping us. They see the value in what we’re doing, so the big real estate investors – they’re using it in their business… And then they’re running a coaching program and they’re having their students use that also. So that’s kind of how we’re growing right now.
Theo Hicks: How do you balance your time between running this REsimpli business, while also managing – and I’m assuming continuing to grow – an active portfolio of properties?
Sharad Mehta: Yeah, absolutely. So I also own a property management business. So I own three businesses – my fix and flip business, property management, and REsimpli. Most of my time is spent on the software business. But as far as my fix and flip business, as I’ve said, it’s very hands-off, more or less. I would say I spend about an hour a day at most in the fix and flip business, maybe even less. And the only person that’s local in the area is my acquisition person. We have nine flips going on right now, and my project manager is based in California, managing everything from California, for projects in Indiana.
Everybody is very clear on what their roles and responsibilities are, and we do a daily call at the end of the day just to make sure how everything is going… And I’m in the process of hiring a fractional operating manager for my fix and flip business. As we’re looking to scale that, we wanna put a little bit more processes and systems in place, so I’m in the process of hiring somebody for a few hours a week just to oversee the growth.
And then on the property management side of it, I literally just have one call once a week for half hour, just to go over how everything is going. So that’s the extent of my involvement in that business.
Again, people that are working in these businesses – they’re the ones who are superstars, managing everything and very independent, making sure everything is very clear in their roles and responsibilities. And then I spend most of my time on the software side, because there’s a lot of moving pieces.
We’re working with a large development team, and then we’re partnering up with a large company. Actually, today we’re going live with our partnership, so we’re hopefully looking to scale with that partnership. That’s where most of my time is being spent.
Theo Hicks: Congratulations on that partnership. One of the things you mentioned was — I’m getting the idea that you have a really solid team, that allows you to be so hands-off on both the fix and flip and the property management business… So my question to you is “What did you do when you hired these people to ensure that they were superstars?” And then on a similar note, are these people who have been working for you the entire time, or did it take some trial and error to find the right team?
Sharad Mehta: It’s been a little bit of both. We started the property management about two years ago, so I’ve had the same two main people work for me. We’ve had other part-time people just kind of come and leave, but the main people have been there since the beginning.
And then on my fix and flip business, my project manager has been with me since — when I moved to California is when I hired her, when I was living in California. So she’s been with me for five years. My acquisition manager has been with me for two years, and then we have a virtual team that’s been with us for about six months.
So definitely, having a team that you can stay with for a long time – I could not be this hands-off if people were leaving every six months, for example… Because just the training and onboarding would take up a lot of time. So finding the right people, investing in them in the beginning, and then trusting them with the business, making sure that they can run the business.
At this point, my project manager has full access to my banking, for example. Not even making the payments anymore; she has access to the payments, so I trust her to the point where she’s making all the payments to the contractor. The only involvement that I have on that side is [unintelligible [00:13:25].19] when we buy a property, make sure before we buy it what the rehab budget is going to be. And then after that, we kind of know “This is our estimated profit at the end of the day.” And then she has full authority to hire whoever she wants, and then make the payments. With her I do a weekly call, just to go over the project, to see where we stand with budget [unintelligible [00:13:43].09] and then just tweak anything if we need to.
Theo Hicks: When you hired this person, how did you find them and what was your screening process? For them in particular, because it sounds like they’ve been with you the longest, and they’re the one that you trust the most.
Sharad Mehta: Right. The project manager I actually found on Craigslist. I interviewed a couple of different people. For me, the most important thing is finding somebody that I can trust, because I don’t wanna find somebody that I’m not able to trust them 100% with my business. Because the goal is to keep scaling, and then to keep making them in charge of a bigger piece of the business. But it doesn’t start with day one, it starts with “Okay, let’s just give them one piece of the puzzle and see how they handle that. If they feel comfortable and they’re able to manage it, then start delegating more of that, start trusting them with more.” So they have to win the trust.
I’ve had other people that are trusted in my business, and things didn’t go well. But that’s the nature of the business. But I have found my project manager through Craigslist, and then mostly everybody else has been through referrals.
Theo Hicks: Thank you so much for sharing that. Okay, what is your best real estate investing advice ever?
Sharad Mehta: I would say best real estate investing advice would be focus on one thing and be better at it than anybody else. I think in this day and age with social media we look at other people, they might be crushing it in wholesaling, or fix and flip, and then if our focus is real estate rental properties, then we might look at somebody else and go “Oh my God, look at them. They’re doing so awesome, and it’s taking me forever to build my portfolio.” So I would say just focus on one thing, be clear on it, and then stick with it, and be better at it than anybody else.
Theo Hicks: Solid advice. Definitely do your best to avoid the shiny object syndrome, especially when you’re first starting out. Everything looks great, and you wanna do everything, and then you end up doing nothing… Solid advice. Okay, are you ready for the Best Ever lightning round?
Sharad Mehta: Yes, sir.
Theo Hicks: Okay. First, a quick word from our sponsor.
Theo Hicks: First question, what is the best ever book you’ve recently read?
Sharad Mehta: I have two books. On my personal side I would say The Book of Joy, by Dalai Lama. It’s an amazing, amazing book. And then on the business side, it’s The ONE Thing, by Gary Keller. It’s the best book. I’m actually reading with my software company, reading it as a team. So I’d say The ONE Thing for business.
Theo Hicks: That book definitely aligns with your best ever advice, too.
Sharad Mehta: Yeah.
Theo Hicks: Okay. If your business were to collapse today, what would you do next?
Sharad Mehta: Man, I absolutely love real estate investing. I thought about it. I love real estate investing… I would figure out what went wrong, learn from my mistakes, and then just think of a better real estate investment. I wouldn’t wanna do anything else.
Theo Hicks: If there’s a time that you lost money on a deal, how much did you lose and what lessons did you learn?
Sharad Mehta: I’ve recently lost $30,000 on a loan that I gave on a property to someone… And then another $15,000 on a flip that I did, that we were trying to do in Chicago. So again, the lessons that I learned from the loan was this was a loan that I gave to a friend; I still did my due diligence, so the lesson was make sure you always do your due diligence, even if you are giving money to somebody that you’ve known for a long time. So that was one thing.
And then the flip in Chicago was we kind of went outside of our own thing, we kind of went outside of the area that we know… So got a little bit greedy with this different market, and things didn’t work out so well, so we lost $15,000 on that.
Theo Hicks: On the positive side, let’s talk about the best deal you’ve done.
Sharad Mehta: A recent one we did this year – we bought a property for $5,000, put about 15k into it, and sold it for 100k.
Theo Hicks: What is the best ever way you like to give back?
Sharad Mehta: What I do is for every property that we sell, we pay for a kid’s education in India. So the best gift I ever got in my entire life was [unintelligible [00:18:09].20] They put me in a position where I was able to go get education, so that’s kind of my way of paying back – every property we sell, we pay for a kid’s education in India.
Theo Hicks: That’s awesome. Last question, “What is the best ever place to reach you?”
Sharad Mehta: The best ever place to reach me is through REsimpli.com. We’re very active, and anybody can reach us, and we’ll get back right away.
Theo Hicks: Well, thank you so much for joining us today and giving us your best ever advice. Some of the things that we talked about was how you were able to leave your full-time job and start in real estate full-time, and how you initially scaled through money you had saved up, as well as through a very aggressive private lender, because of your focus on owning properties free and clear.
We also talked a little bit about your software company, REsimpli, and then we focused on how you’re able to manage your time between the other businesses, which really was all about having a superstar team to be focused on what are some of the things you need to do in order to find those team members, and the process of slowly building up trust by giving them one piece of the puzzle, seeing how they handle it, as opposed to just giving them access to everything from day one, because that’s gonna lead to trouble… And then your best ever advice, which is to focus on one thing, and then be better at it than anyone else, and avoid that shiny object syndrome.
Thank you again so much for joining us today. Best Ever listeners, as always, thank you for listening. Have a best ever day, and we’ll talk to you tomorrow.
Sharad Mehta: Thank you.
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