Why There Are No Great Markets, Only Great Timing | Neal Bawa

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The MORE Show 38 min 1 speaker 8 chapters transcribed
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What makes Neal Bawa’s “Mad Scientist” approach to multifamily investing unique?

Neal Bawa 0:00
So for 10 years, from 2003 to 13, I invested in real estate by myself, no investors, nobody else, just me, personal money.

How does Neal’s portfolio distribution across Utah, Idaho, Phoenix, Texas, and Atlanta shape his strategy?

Neal Bawa 0:06
And then in 2013, sold my company, had a massive taxable event.

Why does Neal argue that there are no permanently great markets, only great markets at the right time?

Neal Bawa 0:10
And my accountant said, you can't just go buy apartments with your own money.

How did a massive taxable event in 2013 push Neal into syndication and change his tax strategy?

Neal Bawa 0:14
You need to do something called syndication.

What tactics allowed Neal to sell out a 237‑unit apartment syndication in just four hours?

Neal Bawa 0:16
So you also get some of your limited partners depreciation. And that's the only way you're going to get your tax bill down. So I bought large numbers of apartment complexes and

Why did Neal decide never to invest in Chicago again after his first multifamily deal?

Neal Bawa 0:24
I'd been gathering real estate data since 2009 and publishing it. So there were thousands of people on my list. And I thought that maybe, you know, I can maybe get, you know, 80% of my own money and 20% of other people's money. As it happened, the list was very nurtured over the last four or five years because I'd never asked them for anything. And the entire 237 unit apartment syndication was sold out in four hours.
Justin Colby 0:56
What is up, The Moore Show family? As always, we're back with another guest talking about maximizing all of the opportunity in real estate. That's what we're here to do.

What are the three main reasons Neal prefers multifamily over single‑family investing?

Justin Colby 1:05
Now, this guest is named the mad scientist of the multifamily. He has over 400 million doors under management, but really his passion is understanding market data. And that's where he can help me help you. And we need to be listening to Neil Bawa. How are you, friend?
Neal Bawa 1:24
Well, great. Thanks for having me on the show. I'm really excited to be here. You know, we had a fun sort of early chat and I was like, this is going to be interesting.
Justin Colby 1:32
Yeah, I love this. So not to mention, I love apartments. You have 400 million under management. Talk to us about your portfolio. Where is it? Why that?

How is Neal’s fully automated AI underwriting tool transforming deal analysis at scale?

Justin Colby 1:43
You know, how did you get to build to that level?
Neal Bawa 1:46
So I'll give you the portfolio size and then the story. The current portfolio is about 4000 units and units of all different kinds. They're in seven or eight different states. There's a big cluster in Utah and southeast Idaho sort of together. And then there's two very large apartment complexes in Phoenix, a 240 unit and a 320 unit unit. And then we've got a bunch of them in Texas. So, you know, three sort of clusters. We have one in Atlanta as well. I do jump around a lot. So a lot of people say, you know, once you master a market, stay in it. I don't believe that at all. I think that that's wrong. That's lazy. My belief is that there are no great markets in America. There are only great markets at certain points of time and then they change.
Neal Bawa 2:32
Right. So Austin has been both been the best market. And the worst market in America in the last five years, for instance. So, you know, I tend to jump around quite a bit. You know, the second part of your question was, you know, how did I get to this point? So I'm a recovering technologist. So computer science degree, data science is my passion and my interest and ran a tech and health care education company for 14 years. Ninety nine to twenty thirteen. And while I was doing that, you know, I was earning the big fat tax salary and I live in Taxifornia. So, you know, 50 percent, you know, taxation. And so I quickly learned that real estate was a really awesome way to reduce my my taxes, built a lot of campuses for my company that also reduced my my taxes.
Neal Bawa 3:19
So for 10 years, from 2003 to 13, I invested in real estate by myself. No investors, nobody else, just me. Just, you know, personal money. And then in 2013, sold my company, had a massive taxable event. And my accountant said, you can't just go buy, you know, apartments with your own money. You need to do something called syndication. So you also get some of your limited partners, you know, depreciation. And that's the only way you're going to get your tax bill down. So I bought large numbers of apartment complexes. I'd been gathering real estate data since 2009 and publishing it. So there were thousands of people on my list. And I thought that maybe I can maybe get 80% of my own money and 20% of other people's money.
Neal Bawa 4:02
As it happened, the list was very nurtured over the last four or five years because I'd never asked them for anything.

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