Jason Balara of Lark Capital Group shares his journey from being a veterinary surgeon to becoming a successful real estate investor. With a focus on multifamily properties, student housing, self-storage, and even small businesses, he provides insights and strategies that will captivate commercial real estate investors looking for diverse opportunities.
Key Takeaways:
- Diversification Matters: While specializing in multifamily properties in a specific market, he also explores opportunities in student housing, self-storage, and even small businesses. Diversification can help mitigate risks and create a well-rounded portfolio.
- The Power of Syndication: Syndication allows investors to scale their projects and take on larger deals while transitioning from a hands-on approach to a more CEO-like role. It's a way to leverage the expertise of others and build wealth over the long term.
- Impact-Driven Investing: Apart from financial gains, Jason discusses the importance of making an impact through investments. He shares his commitment to helping fellow veterinarians improve their financial situations and highlights the significance of strategic partnerships and giving back to the community.
Jason Balara | Real Estate Background
- CEO Lark Capital Group
- Portfolio:
- Active:
- 236 units multifamily
- 450 units self-storage
- 101 units student housing
- Passive
- 600+ units multifamily
- Fund: 450 units multifamily
- Active:
- Based in: Los Angrles, CA
- Say hi to him at:
- Best Ever Book: Who Not How by Dan Sullivan
- Greatest Lesson: Perfection is the enemy of growth.
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Transcript
Narrator:
Quick disclaimer, the views and opinions expressed in this podcast are provided for informational purposes only and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. For more information, go to best ever show.com
Jason Balara:
Start that clock start your money growing there's going to be ups and downs. But if you wait to get started, you've missed all of that.
Narrator:
Welcome to the best ever show the world's longest running daily commercial real estate podcast. Our hosts interview commercial real estate experts every day to get you the best advice ever with none of the fluffy stuff.
Ash Patel:
Hello, best ever listeners. Welcome to the best real estate investing advice ever show. I'm Ash Patel and I'm with today's guest, Jason Balara. Jason is joining us from Los Angeles, California. He is the CEO of Lark Capital Group. They syndicate multifamily and small businesses focusing on long-term wealth and impact. Jason's portfolio consists of over 1500 units of multifamily, self-storage, student housing, and passive investments. Jason, thank you for joining us and how are you today?
Jason Balara:
I'm great Ash, thanks for having me on. I'm really excited to talk.
Ash Patel:
Jason, it's our pleasure. If you would, give the best ever listeners a little bit more about your background and what you're focused on now.
Jason Balara:
Sure. Background, interestingly, I am a veterinary surgeon as well as a real estate investor. I probably started that journey in parallel.
I was always doing construction and residential real estate through much of my life. And then I became a surgeon in 2008. Real estate took a little bit of a backseat until 2020, at which point I discovered the world of syndication and commercial real estate. I really liked the idea because you can scale, you can do larger type projects and also just get away from being sort of the DIY guy that I was on a lot of my residential real estate and get into that more of a a CEO role.
So today we syndicate multifamily and we most recently, just this summer, launched a fund which will include real estate as well as small businesses.
Ash Patel:
A lot to dive into. Who is we?
Jason Balara:
I guess when I say we, I say Lark Capital as well as our investors. So I include the investors as obviously an integral part of the team.
Ash Patel:
Got it. How did you find commercial real estate? And you said, 2020, I discovered syndication. What was that process?
Jason Balara:
Yeah, podcasts like this one to begin with, I think the first time I heard about it might've been on the BiggerPockets podcast, but then I actually just started doing as much research as I could. I bought what I consider sort of the textbook, Joe Fairless's book, that the best ever guide to syndication, just kind of dove in full force because I really did like the idea of maybe something that was a little less being there every day, swinging a hammer, that kind of thing, which is most of what I had done up to that point. And I liked the scale of it.
I live in Los Angeles, real estate, it's very doable here, but it's maybe a different strategy than you might do in other parts of the country. So at first I was looking at long distance rentals on the maybe single family side, more of a residential approach.
And then I just got to the point where I thought, okay, how long is it going to take me to acquire say a hundred single family homes? And that seemed a lot more daunting than figuring out how to buy 100 unit apartment complex and take it from there. And when you have a bad experience, it's like, Oh my God, this could be multiplied by a hundred bad tenants, bad furnaces.
Ash Patel:
Yeah. Right. I get that. Okay. So you're educating yourself on syndications, what was your first action step?
Jason Balara:
To get a mentor. I signed up for a mentorship. I did a lot of the on your own learning podcasts, books, all of that. But then I did a mentorship with Ellie Perlman at Blue Lake capital.
Ash Patel:
What was the takeaway from that?
Jason Balara:
To be quite honest at first, it was very frustrating, not because of her, but because one thing that I think is very different between single family, residential real estate versus commercial real estate is the time to transact in a lot of instances. So I think with house flippers, you hear about them doing maybe 50, 100 houses a year. And on the commercial side of things, if you do four or five deals in a year, that might be a lot. So it took me probably six months within that mentorship of just learning, trying to create relationships with brokers, property management, all of that, and formulate my strategy. And I had gotten pretty discouraged, but she just kept pushing me towards. And I think this still applies to be true.
Do you want to be the deal finder, maybe the operator, or do you want to be the person who finds capital? That's kind of how she always told me, obviously there are more roles than two, but she kind of broke it up that way. And I think it makes a lot of sense in terms of deciding how you want to be in this business. So it was great. The mentorship, I think for sure cuts down on learning curve and things like that, but it is also in commercial real estate, people need to understand if they want to be active investors. It might take a while to get started.
Ash Patel:
Jason, what did you pick? Did you want to be the deal finder?
Jason Balara:
Yeah, I picked a deal finder and operations. I very much gravitate towards asset management because of my construction background, and I know construction is not the only component of asset management, but it's really what I understand. And I can speak to contractors and understand what we're trying to accomplish in terms of a business plan. Also, I'm a very reluctant capital raiser.
So it's as much as I was drawn towards asset management as I was put off by capital raising. I've never really wanted to be. Oddly enough, here I am on a podcast. I never really want to be on camera. It's not a comfortable place for me. Starting the fund has been actually in large part a way to try and push myself out of my comfort zone and make capital raising more of a all the time thing rather than on a deal by deal basis.
Ash Patel:
Why are you uncomfortable with raising capital?
Jason Balara:
To me, for a long time, it felt like asking for money. And I recognize that what we are doing is providing opportunities. But I think that my background, I grew up, I didn't have a lot. So I think I come from a bit of a scarcity mindset. And I think a lot of the people maybe in my network also have that mindset. So the discussions aren't, never easy, but I don't find them easy.
So it's been something that I've tried to work very, very hard on shifting my mindset and how I look at what raising capital means. I 100% believe in real estate as a vehicle for people to grow their wealth. So I definitely think I have been letting my network down by not doing as much of that as I should, but it's something that's just been a transition for me to come around to that in my head.
Ash Patel:
I was you for the better part of 10 years. I was very uncomfortable with even bringing up this topic of investing in our deals. And I'll tell you, there was a pivotal moment for me when I realized that a lot of my high net worth friends were investing in bars, restaurants, crypto, marijuana companies, and they were getting no returns. And I realized I would be doing them a favor by letting them into my deals.
And you said that as well. You said, I might've been doing my network a disservice. So yes, that's what helped me get out of my own way and be comfortable with having these conversations about investor capital, investing in our deals. So you've got a great track record. Joe Fairless says that you're being selfish by not allowing investors into your deals. Yeah.
So the perspective, and I'm glad we're having this conversation because if you and I were there for a while, I bet a lot of the best ever listeners are struggling with that as well. So Joe's thing is master your craft. Once you master it, you owe it to your network to take on investor capital. So how far do you want to push yourself out of your comfort zone? Cause now you have the ability to get other investor relations people in. But are you going to take a forward roll on that?
Jason Balara:
Yeah, I think it's really my responsibility to be sort of that forward roll. You ask how far I started a $10 million fund, which I know to some is small when there are billion dollar funds and things like that out there. But to me, that's a huge push outside and full transparency. It's been hard. It's hard to raise that much money. Maybe a couple of years ago, we were in a different environment for raising capital, but also a few years ago, I didn't really have a track record under my belt. So I think it's just recognizing the work that needs to be done.
I've heard people talk at conferences and on podcasts and things like that, that in this type of market, we have to work two, maybe four times as hard for the same result as we did when it's a bull market and everybody's in. So now it's not just being blocked by my own limiting beliefs, pushing beyond that and putting extra into it.
Ash Patel:
Jason, once you got educated and once you figured out your ideal role in a syndication company, what was your next action step?
Jason Balara:
It was all along building the relationships, meaning calling brokers, reaching out. I think one mistake I made in the beginning was trying to look too broadly in terms of markets. I thought if I looked at deals, in almost all of the markets that I could access, then that was better. But really what I did was actually get a little bit more narrowed down. And I said, okay, this is too much. I'm going to focus on one market. And for me, I chose Atlanta and I have gone all in on Atlanta. So it was narrowing my focus and continuing to build those relationships, build a team, build boots on the ground in that location.
Because syndication is such a big process. It is very hard to do on your own. So either you have to find people that are going to work within your company, or you have to find people to partner with. So it's just kind of continually creating relationships. And then along the way did things with capital, like did some hard money lending. That self-storage deal was a joint venture. So that wasn't a true syndication, but through these relationships, I met other people in the industry that were working in self-storage, a good deal to get involved with.
And it took almost, I would say, nine months to get my first multifamily deal under contract. So like I said, it just takes a long time, especially when you're first starting out to get the deals going.
Ash Patel:
Jason, I'm reading a lot of headlines about oversupply in Atlanta. What's happening? They're building too much or what?
Jason Balara:
There's still a lot of demand. I would say the biggest problem in my mind in reality in Atlanta is there has been so much growth and it's a huge city. That's actually one of the reasons I like that it, it's always on that top 10 growth city, but it's never number one, two or three. It's always there, but not that super hot city. I think the biggest problem we have right now is infrastructure.
People invest in the Southeast and Texas and things like that, because those are landlord friendly states and they're landlord friendly until the cities and counties can't actually keep up with residents that aren't paying, things like that, evictions that have to be processed. To me, that's what I see as the biggest problem. I think they're moving towards addressing those things at the city and county level. There's a lot of news coming out of there. One of the counties we're in, they just approved a $1.1 million budget to help with processing evictions.
The city of Atlanta just came out with an eviction. I'm not sure exactly what they termed it, but eviction avoidance, so allowing residents to apply for assistance and things like that. So I think that there's going to be maybe a period here of leveling out. And then I think Atlanta will be in a boom again.
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Jason Balara:
I love Atlanta and I love that it never had a parabolic rise. It had steady growth, great news on employers coming to town, but it's not like Austin, Miami or other southern Florida areas where it's just sky's the limit and when it, when the dust settles, man, does it settle.
Yeah. I think you mentioned Austin. There's been a big pullback in pricing there. I think Texas and Florida has been hit by huge insurance increases. Everybody's got insurance increases, but those specific states, it's made exponentially bigger. So there's a lot I like about Atlanta. Every market is going to have challenges, right? I live in LA. There are challenges here. It's just knowing what the challenges are and adjusting to be able to work within those challenges.
Ash Patel:
Yeah, so living in LA, what's the challenge with investing across the country?
Jason Balara:
Just having the right team in place. Flights are readily available from LA. I could go to Atlanta probably on 20 different flights in a day. I go there regularly. I typically take a red eye because it's less time away from my family. So I get my kids to bed and go to the airport and show up in Atlanta at about six, seven a.m. and get started. So it's very easy to get there but you want the right team in place. I don't wanna be going there every single day. So it is definitely always about team, I think.
Ash Patel:
Yeah, it's the busiest airport in the world. So I would imagine it's pretty easy to get in and out of.
Jason Balara:
It is, yeah, and pretty well run. LAX is a busy airport, but it's hard to get in and out of, but Atlanta has actually done quite well.
Ash Patel:
Yeah. Jason, you invest in multifamily, student housing, self-storage, and you're also a passive investor. You hear a lot of focus on one thing. You, you're focused on one market. Why not focus on one niche within that market?
Jason Balara:
Within Atlanta, multifamily is all I do. So within that market, I am focused in on one niche. The self storage, like I said, is a joint venture that was being opportunistic. And I very much believe in being opportunistic. The self storage, I have to do very little in terms of the asset management there. I have a smaller role on that team. Same thing with that student housing deal, smaller role.
And the passive investing, obviously in an ideal world, that's passive as the name states, and I don't have to do a whole lot of work other than vetting those sponsors. So I strongly believe in the power of time when it comes to investing. And I also started this in my mind. I started late, not that it's, it's never too late to start, but I'm 48 and I got real serious into this in 2020.
So my goal is to get as much as I possibly can invested even on the passive side so that I can start that clock of every five to seven years having your investments double.
Ash Patel:
Jason, you have a task of raising $10 million. Are you raising ahead of needing the capital or do you have deals lined up?
Jason Balara:
It's both really trying to raise ahead of needing the capital for sure. The fund is open taking accredited investors. We already have the first deal that went through the fund. So that happened and closed that opportunity became available really before I was actually fully ready to launch the fund. So there was a little bit of a scramble, which was exactly what I was trying to avoid by having a fund, but it is what it is, right? You take advantage of the good opportunities.
So, yeah, it's ongoing, but we'll continue to raise and find deals as they show themselves.
Ash Patel:
What was that deal?
Jason Balara:
That's a 432 unit multifamily in Phoenix, Arizona. And that was essentially as a fund to fund structure. So we partnered with Ali with Blue Lake Capital and I gathered investors and we brought money to that deal as well. So the fund, I don't know if it's a completely unique structure, but I kind of figured out what I wanted to do in a lot of ways by what I wanted personally in my portfolio. And then I thought, why can't we do this for investors?
So the fund, we'll have our own multifamily real estate within it. There's a portion that can go as fund to fund. And then also we're adding some small businesses.
Ash Patel:
Interesting. The small businesses, what's your background in that and what are you looking for?
Jason Balara:
I run a small business. As I mentioned, I'm a veterinary surgeon. I have my own business and have for seven years. However, not planning on buying veterinary businesses within the fund. The idea is to buy the cash flowing in-place operators, the more, I guess, no business is simple, but things you would think of like car washes, laundromats, nail salons, high cash, low overhead, and again, established in in-place operators. I don't have any intention of spending all my time in a nail salon. I wouldn't know what to do there, but I can look at the numbers and help with marketing and things like that to help grow those businesses, but really just looking for established cashflow.
Ash Patel:
What are you doing to raise $10 million?
Jason Balara:
Well, this, I guess, is one thing. Being on podcasts, I've got my own podcasts, but I think getting on well-known podcasts like this and putting the word out, we have a team, my assistant, we also hired some VAs to help with some of the social media marketing and outreach.
I think it's just a continual, almost like creating a machine of being present, putting out as much education as we possibly can. My niche is other veterinarians. I would be thrilled if the majority of the investors that come into this fund are other veterinarians. And so far they have been. It's not exclusive to veterinarians alone, but certainly those are the people that I know and I can relate to in terms of what they've gone through from a schooling standpoint and the student debt they might be facing.
And so how can I help them improve their financial situation? It's a lot about impact for me.
Ash Patel:
There has to be some publications centered around veterinarians, right? Do you advertise in those?
Jason Balara:
We haven't yet. We did had a booth at one of the trade shows. We haven't put anything in any of those publications, but we have partnered with a couple of organizations. There's something called veterinary financial summit. And I was a part of that. And I sat on one of the panels.
Our fund, I mentioned impact, we also partnered with Not One More Vet. So a lot of people don't know this outside of the veterinary community, but veterinarians have one of the highest suicide rates of any profession and Not One More Vet is dedicated towards helping with that. So many of us know someone, a friend, a colleague, someone within the community of veterinarians that we've lost to suicide. So we were actually donating 25% of the profits that are generated by the fund to not one more vet. So we have formed some strategic partnerships.
Ash Patel:
Why is the suicide rate so high?
Jason Balara:
Oh man, how much time do we have? There is a lot of stuff that people outside of the industry don't know. One is certainly student debt. A lot of the people, especially now that are coming out, might have two, three, sometimes $400,000 of student loans. So they're coming out with already a huge debt burden before they've bought a house or done anything else.
The hours worked are tremendously high. It's a high stress environment. And it's also, I think in comparison to MDs and people on the human medicine side, disproportionately lower salaries. So vets are kind of getting it from all sides. That's the financial component of it. Then if you talk about things like compassion, fatigue, and sometimes being asked to do convenience euthanasias. There's just a lot of stuff that vets are faced with on a day-to-day basis.
And then I think there's some level of personality type that becomes a veterinarian. A lot of vets love animals. They all love animals. They didn't get into it to make any money because they're almost guaranteed not to. They love animals, but maybe don't wanna deal with people as much. And then I guess it shouldn't be a surprise, but guess what? Every one of those pets has an owner attached. So you're dealing with people the whole time anyway, and I think there's some level of maybe unexpected interactions that have once you go into the field.
Ash Patel:
Yeah, and it's insanely competitive to get accepted into vet school, isn't it?
Jason Balara:
Yeah, it's tremendously competitive.
Ash Patel:
Why is that?
Jason Balara:
There's less vet schools than there are medical schools. That's one of the big reasons. I don't know exactly what the numbers are in terms of actual applications for vet school versus medical school. But there's far more medical schools than there are vet schools. There's actually an initiative right now to open up more vet schools to decrease some of that.
Plus the industry just needs more vets. We need more support staff. During the pandemic, it seems that everybody spent their stimulus money on a new pet because the number of pets in the U.S. doubled and the number of vets and technicians went down. So the already overworked people then we're faced with a higher caseload and less staff to handle it.
Ash Patel:
Yeah. Thank you for sharing all of that. Jason, what is your best real estate investing advice ever?
Jason Balara:
For me, it's get started. Whether you want to be active or passive, the best thing you can do when it comes to investing is get started and start that clock, start your money growing. There's going to be ups and downs, but if you wait to get started, you've missed all of that time.
Ash Patel:
Jason, are you ready for the best ever lightning round? What's the best ever book you recently read?
Jason Balara:
For me, it's Who Not How. And I've read it more than once, but like I said, I was truly a DIY guy and I still struggle against that tendency, but the who, not how really changed my mindset and perspective of what you can accomplish by bringing in the right people and empowering them.
Ash Patel:
Jason, I think we covered this, but the best ever way you like to give back.
Jason Balara:
Yeah, we did. For me right now, it is our fund. It is truly impact driven to give back to my colleagues in the veterinary community.
Ash Patel:
Jason, if you would please share details about your podcast and how the best ever listeners can reach out to you
Jason Balara:
Sure, my podcast is called the know your why podcast. We talk about the motivation behind people's success. The best way to reach out to me is either go to our website which is lark capital comm or you can email me directly. It's Jason at lark capital.com.
Ash Patel:
Jason. I enjoyed our time together. Thank you so much for taking part of your day and sharing with us today.
Jason Balara:
Yeah, it was my pleasure. Thanks for having me on.
Ash Patel:
Best ever listeners, thank you as well for joining us. If you enjoyed this podcast, please leave us a five star review. Share this episode with someone you think can benefit from it. Also follow, subscribe and have a best ever day.
Narrator:
Hi, best ever listeners, Joe Fairless is here again. And one last thing before you go, would you like to receive a short weekly email with proven tips from experienced investors, free tools and resources and a roundup of the week's most relevant news and best ever content? Well, if so, join the community of nearly 15,000 commercial real estate passive and active investors who receive the Best Ever newsletter. Just go to bestevercre.com forward slash access and you'll get the very next one. I hope you enjoyed this episode and as always, thank you for listening and have a best ever day.
