When Sujata Shyam was asked to transfer across the country for her corporate career, she decided to take 100 days off to consider her next move. 100 days turned into 18 months of traveling and experiencing the world, and Sujata soon realized she wanted a career that would help her maintain this new sense of freedom. She discovered that running her own Airbnb business could provide her with the passive income she needed, and before she knew it, she’d launched a full-fledged real estate career.
Today, Sujata is the managing principal at Luxe Capital Investment Group, Ltd., an education-based investment firm focusing on multifamily, ATMs, and self-storage. In this episode, Sujata shares why she feels she isn’t well-suited for the corporate world, how she started her Airbnb business, how she qualifies investments for her investors today, and why she believes that investing in real estate should be boring.
Sujata Shyam | Real Estate Background
- Managing principal at Luxe Capital Investment Group, Ltd., an education-based investment firm. Their current focus is on multifamily, ATMs, and self-storage.
- Portfolio:
- GP of:
- 10 units
- Seven short-term rentals
- LP of:
- $400K across nine self-storage and multifamily deals
- Based in: Portland, OR
- Say hi to her at:
- luxe-cap.com
- Instagram: @seekingsuja, @cash.flow.queen
- Greatest lesson: Real growth is never convenient.
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TRANSCRIPT
Ash Patel: Hello, Best Ever listeners. Welcome to the best real estate investing advice ever show. I'm Asha Patel and I'm with today's guest, Sujata Shyam. Sujata is joining us from Portland, Oregon. She is the managing partner at Luxe Capital Investment Group, which is an education-based investment firm. Their current focus is in multifamily, self-storage and ATMs. Sujata is a GP on 10 units and seven short-term rentals, and an LP on nine self-storage and multifamily properties. Sujata, thank you for joining us, and how are you today?
Sujata Shyam: I'm doing great. Thank you so much, Ash.
Ash Patel: It's our pleasure to have you. Hey, before we get started, can you give the Best Ever listeners a little bit more about your background and what you're focused on now?
Sujata Shyam: Yeah, absolutely. I've been interested in real estate since I went to business school, and I interned at a developer, and that's still a long-term interest of mine... But I ended up underwriting multifamily investments for institutional equity partners. So we were basically syndicating funds, and the investors in those funds were other institutional equity partners, like banks, pension funds, life insurance companies, etc. So I have kind of an institutional background, and that's where I sort of cut my teeth in terms of learning the multifamily space.
And since then, I decided I wanted to be an entrepreneur and not work in that sort of corporate, bank environment. And I built my own real estate portfolio. I house-hacked, I did short-term rentals, I did one flip - that was like the very first deal I did - and my short-term rental portfolio really has replaced my corporate income. I was able to achieve that in three years, just with a pretty small portfolio, but it's so high and cashflow that it replaces my corporate income. And at that point, I decided I like short term rental, but I don't want to be all-in on hospitality. I want to diversify my income streams, and so that's when I went back to the world of syndications, but this time in the private placement space, where I'm working with individual investors instead of being in a bank and having other banks as the investors.
So now that's what I do, I help investors gain access to some of the best deals across the space, and we invest across asset classes, operators and geographies... So my investors have access to a diverse array of these amazing commercial real estate investments.
Ash Patel: Awesome. Hey, I've got to ask you - how many years into your career were you before you realized you wanted to go out on your own?
Sujata Shyam: Oh gosh... I lasted in corporate about two and a half years before I cut the cord and took a big break from it. So I wasn't ever really very well suited to be in an office environment; I wasn't thriving. But at the same time, Ash, I had the golden handcuffs. So I had worked my way up over the course of those two and a half years or so, and I had an office with a view, I was making really good money, I had the things that I thought I was working towards... And I also bought a house... And it was a really comfortable period of time. Honestly, the only reason I think I was able to cut the cord was because it was a bit of a forced hand. So my company went through a merger, which failed, and I would have had to move across the country to stay with the company. But I decided "I'm going to take some time." And my friends - thank God for surrounding myself with good people - they just encouraged me "Take some time for yourself, rather than just jump back into another underwriting job." Because I was also doing that, and I was interviewing for other jobs, and I was thinking, "Okay, I can easily get in here, or here..." But my friends said "Just take 100 days. Take about 100 days", and that 100 days was like a mental hurdle that I needed to get over. Once I decided I was going to take 100 days off from being in the corporate environment, my mind was expanded, and I decided, "Okay, I'm actually going to just go traveling with no return ticket."
And the golden handcuffs - it really took me a long time, over a year to sort of unwind the mentality that I needed to have a paycheck, and that I wanted to be an entrepreneur. The layers of social societal conditioning that I personally felt - it took a while. But that trip I do credit, and I did all sorts of things on that trip. I rode horses in Patagonia, I built an earthship, I surfed, and danced tango in Argentina... And I just did all kinds of great things. And that sense of freedom - I just didn't have that ever in my working life.
Ash Patel: Yeah. You said you're not well suited for the corporate world. Why is that?
Sujata Shyam: Well, it's taken me some time to really reflect on that, and figure out what story I'm going to tell myself about that. But what I've sort of come to is that I need to be motivated to pursue my own dreams, rather than work as kind of a small part of a big thing. What really gets me juiced is working on something that I'm directly going to be benefiting from, and I've found that when I was working in the corporate world, as my responsibilities increased, after a certain point, my pay only increased incrementally, and it was also capped. So you're just continued to expect to perform at a higher and higher level and not be able to get compensated for that. Whereas now that I work for myself, there's no cap on how much I can make... And I live or die by what it is that I produce, now that I'm an entrepreneur. And I just prefer it that way, because it just makes me more engaged in what I'm doing day to day.
Ash Patel: Alright, so after this hundred days - you had a real estate background... Did you dive right into real estate, was it the fix and flip?
Sujata Shyam: They said take 100 days, but then I ended up taking 18 months actually traveling the world... And there was a reckoning moment that I had, Ash, where I was traveling, I was in Patagonia, and my sister wanted me to come back for her medical school graduation, and I decided I actually don't want to go, because I was living on so little money at the time. I was just literally living on about $10 a day. And I was having a great life, because I was doing work exchange, and I was meeting people, and I was doing couchsurfing, and it was just really fun... But it was a very low overhead lifestyle. And so when my sister wanted me to come visit, I just didn't want to spend the money to go do that, because I didn't have any passive income, or I had very little passive income at the time... And it was going to seriously cut into my runway of how long I could continue traveling.
So when I told her that I wasn't going to make it back for her graduation, she stopped talking to me, which was a hard, but important thing. I actually am so grateful for it, because it forced me to get to this reckoning moment of "What am I going to do? What do I really want for my life? Do I really want to just be like traveling in South America for the next 15 years, not making any money, but just having a good time like this? Or do I want to have more financial abundance and be able to have choices in my life where I can be free to do what it is I want with my time, but I can also fly back and forth, and make time for my family, and stay connected to my community etc."
So from [unintelligible 00:09:35.10] Argentina, I googled "passive income." And honestly, I don't know where I heard that. Maybe from some Rich Dad book, or something like that. But I hadn't really thought about it in a long time. I was just like, "I need passive income." So I googled it, and I found that there was just this whole world of people pursuing passive income. And I'll tell you, Ash - you asked me what did I do first, what did I dive into. Well, I later realized that I had these limiting beliefs about real estate, because - okay, at this point in time I had worked in real estate, I had worked in multifamily syndications for institutional equity. I had flipped a house and rented it successfully; a very successful project, and did it with no money to my name when I started it. And I had bought a house and I was house-hacking it. So my first house was cash-flowing within the first month of me purchasing it. So I had several wins in the real estate space. But when I googled passive income, I also, unbeknownst to me, had limiting beliefs around real estate. So when I started to pursue entrepreneurship, I pursued everything but real estate; the limiting belief was unconscious, so I didn't really know that I had it at the time... So I actually started out as a digital marketing consultant when I decided to pursue entrepreneurship.
Ash Patel: The typical nomadic go-to occupation, right?
Sujata Shyam: Yeah, back then it was fine and new. It was 2015, and it was on the newer side of things you could do. And I liked that, and I learned a ton. What I found is that I didn't actually really like having high-value ticket clients. I found that stressful, and the whole point of my work was to not be stressed out. So it was just too much. I was kind of also sort of thinking about real estate, but just kind of as a side project; I didn't really fully commit to it. So I was just learning too many things, and eventually, I was like, "I've got to cut something out if I want to make any progress", and I started listening to Bigger Pockets. That's when I actually got into Airbnbs and short-term rentals. I had a basement apartment -- I told you I was house-hacking my house, so I had a basement apartment, and when I came back from my travels, the manager had put this person in the basement, who... She actually didn't want to go upstairs; she just wanted to stay down there. And look, the basement at the time, it didn't have a kitchenette, it had a tiny bathroom, and it was in the basement. It wasn't that nice at the time. But this person - she wanted to stay down there, and that was a light bulb moment for me... Because I had this five-bedroom house, and I had a number of roommates. It was just like too many people sharing one house, and I felt kind of overwhelmed by it. But when I realized that, like "Oh, this could actually be an apartment, this basement unit that I have", I was just absolutely amazed. And I just decided, "Okay, this is a light bulb moment for me. I can cut my house into different pieces, and then I don't have to share the whole thing. I'll just share the common spaces, and people can have their own space."
So when she moved out, I put the unit on Airbnb kind of just as a stopgap measure. I wasn't really ready to find another long-term tenant... And literally, Ash, I threw an air bed down there, I threw all this comfort -- nothing matched. It was totally ugly. The walls were a different color green from the previous owner, and it was just totally ugly. But guess what - it performed so well. It was summer of 2016, and I was making three times as much as I was with the long-term tenant, but with Airbnb. So I just decided, "Well, I'd better start investing."
So it was literally just one thing at a time. I just started making it a little bit nicer... And I still at this point considered it my side hustle. I considered Airbnb just something I was doing to get by. But over time, as I started liking digital marketing less, and deciding that "Okay, maybe I don't want to do this", then I started to realize that this Airbnb thing, the short-term rental is such consistent income, it's such high cash flow... I wanted more of that.
So the next thing that I did was I started renting out my own room in the house, and I would stay at my boyfriend's house on the weekends. So literally, I just would stay at my boyfriend on weekends and rent out my room on Airbnb. That was good for the time being, but it wasn't a long-term situation. And this led me to my next light bulb moment, which is that -- my bedroom had French doors to the backyard. So what I discovered is that I could actually have the guests enter through the back doors of my house, and then they wouldn't have to come into the living room or through the front door, and I could put a kitchenette in there, I could put a microwave, and a coffee pot, and things like that... And also they had access to a bathroom. So it was another light bulb moment to me.
Anyway, so that's kind of the beginning of my Airbnb story. I slowly grew it from there. I developed my garage into an ADU, and then I purchased a fourplex --
Ash Patel: What's an ADU?
Sujata Shyam: Oh, sorry, an ADU is an Accessory Dwelling Unit. So this was pretty much a small development project. It took me three years to complete actually, because it was a historic district, and if anybody knows anything about historic districts, that can be very difficult to get through... But I was able to build it in three years, so now I have literally three rental units in my house, and I still have my house to myself. I still have at least 2,500 square feet to myself.
And then I bought a fourplex, and I bought it in a commercial zone. So I had the underlying entitlements, because for those of you who are thinking about short-term rentals, one thing you need to be very mindful of is the local zoning laws, and what you can actually do legally. So what I discovered in Portland was that if I could buy a place in a commercial zone, like a fourplex or something like that, that was built after 2012 - then it was built in the new building code - then I would have to do less work to convert the use to a short-term rental. So that's what I did.
I was able to find one -- it feels like a stroke of luck, but I did find one that was perfect for what I wanted. It was located in a great area, very centrally located, and built in 2013... And it was still a long process of converting it to the hotel use, but it provides me with such an edge over other people, because now I have these legal Airbnb units that I can legally rent. A lot of people were breaking the rules for a long time, just renting places out on Airbnb. So that's kind of how I built my short-term rental business.
Ash Patel: So let's fast forward to investments in multifamily, self-storage and ATMs... And you're also a capital raiser, right?
Sujata Shyam: Yeah.
Ash Patel: Okay. How did that evolve?
Sujata Shyam: So as I mentioned earlier, after I replaced my corporate income with short-term rentals, I decided I needed to diversify my income. So this is how I think about my wealth building, is that I've got a business which generates cash flow, but then that requires my attention. I want passive investments that are in diverse areas. So I take the money from my business from my Airbnbs, and I put that cash flow into my passive investments. So that way my income streams are diversified. I consider my Airbnb to be semi-passive income, but I consider my passive investments purely passive investments. So I've got this semi-passive business income that I put into my real estate syndication.
So I've found that when I was getting into syndications, my main thing was -- I saw my parents, their 401Ks went down by 40% in 2008, and a lot of people probably saw something like that. Thankfully, they weren't at retirement age, and they had some runway to recover... But as you know, there's this lost decade from 2000, to about 2013, where the S&P 500 didn't gain any value; it's just been up and down. So I saw my parents lose 40%. Obviously, it did eventually recover, but I was very concerned with downside protection when I was thinking about getting into syndications. I knew that there had been a lot of people in real estate that were hit hard. Obviously, people were able to handle it differently, and what I discovered is that there are actually people who made it through the downturn... And that's my whole approach, is downside protection.
So with that in mind, I focus on recession-resilient asset classes. And to me, you can find recession resilience in a different asset classes. I know you do an amazing job in the commercial space. But for me, I'm currently focused on multifamily, mobile home parks, self-storage, and industrial. And those are some of my favorite asset classes. There's other ones that are intriguing to me, like RV parks, and cohousing, and senior living, and ATMs. So I'm looking for these asset classes which are going to still perform well during a downturn. And then what I do is I use a fund of fund structure and I provide my investors with an opportunity to learn about these different asset classes and to have access to these high-quality deals.
Ash Patel: How did you position yourself for these investors to find you? Because listen, you were a nomad, right? You were the girl that was traveling the world, and you had some good real estate wins... How do you convince somebody that you're the go-to person for their passive investments?
Sujata Shyam: I think the transition for me to presenting myself in a different light was a somewhat gradual one. I did go to business school, and I had a good reputation from that. And what I eventually did was I started building a thought leadership platform. So I started really putting myself out as somebody who's fully focused on real estate now. So I have a website. Sometimes I talk about real estate on social media. I have a newsletter. I also have a podcast that's called Passive Income Unlocked. So just these pieces of me - I started to put them forth and built up what is a more credible investment face, as opposed to just like a wandering traveler... Which - there's also something very attractive about that, as what I've found is that a lot of people were also attracted to that part of my story, of the traveler. So if I can kind of marry those two and be like, "Well, that traveling did actually help me learn that I want to be invested in real estate, because it gives me the freedom to do more of that."
Break: [00:20:02.14] to [00:21:49.29]
Ash Patel: How do you qualify investments that you put your investors' funds into?
Sujata Shyam: So I'm very selective with who I work with, and it takes a long time for me to get comfortable with a sponsor. I follow them closely, I go through a vetting process, I look at their deals, I look at their content, I talk to other people who've invested with them... And I'm really careful to work with just what I consider to be some of the best investors in the space. And I don't work with a lot of different investors. That's another thing, is like - my goal is just to have a handful of relationships that I develop over time, and I continue to work with those people.
So the qualification is a combination of time understanding their investment philosophy, time talking to other people who've invested with them, getting to know them, and asking questions about how their company works, going and visiting them whenever I can, and visiting their properties, talking to some of their investors, and looking closely at their financials, and I do a full review of the sponsors themselves as well.
Ash Patel: Does that include their personal financials?
Sujata Shyam: Yes.
Ash Patel: How deep do you dive into that, and how do you verify those things?
Sujata Shyam: Well, that's a good question. I usually ask for personal financial statements. And usually because people are giving those to their lenders already, it's something that they're willing to share with me. So we're an equity investor, we're also providing capital to the deal, and I'm a trusted partner, so they provide those personal financial statements. And I do a review of them similar to what I would do with when I was working in equity institutions. I read them -- I don't necessarily feel like I need to investigate them extremely closely. Part of the getting to know people process is going and visiting them. Some of our sponsors, I've been to their corporate offices, I've been to their events, we have calls, I have access to their cell phones, I talked to several different people on their team... So part of it is also just getting a gut check on "Okay, how is this company operating? Do people like working for them? Do their vendors like working with them?" So their attorneys... I try to talk to other third-party vendors that work with them, and develop relationships with those people as well. Not necessarily verifying bank statements... I am putting a lot of different pieces together to make me feel comfortable, and also, it depends on the number of people that are there.
I think it's really important to make sure that your sponsor has enough financial backing that they can carry a deal or put money into a deal if it falls short, because that is one place where people can really get tripped up. So I think there's a lot of different ways to go about verifying that, and the way that I've chosen to do it is through building a relationship and verifying it from several different sources kind of looking in.
Ash Patel: Sujata, I've gotta ask you... So on the deals that you bring capital to, what percentage of the total cap stack are you bringing in?
Sujata Shyam: Well, it can really vary based on the size of the deal. We're usually bringing between one and $3 million to the table, and sometimes these deals have a $50 million capital raise, and sometimes they have a $10 million capital raise.
Ash Patel: And what percentage of the GP does a sponsor typically carve out for capital raisers?
Sujata Shyam: Well, the way that I typically do it is through a class share. This is the way that I feel most comfortable doing it. And every sponsor operates a little bit differently, but we have a class share - that's usually it's 500,000+. Sometimes it's a million plus. So any investor who goes into that private placement, they're getting different terms. So we might not have a secondary hurdle, so we might get more of the equity on the back end; we might have a higher pref. And that's the most comfortable way that I feel to go about doing this particular work.
Ash Patel: So you don't really care what they're offering, you kind of go in and negotiate your own terms on a lot of these deals?
Sujata Shyam: Well, by the time that the offering docs are drafted, they've already decided what the class shares are, and then I have to go in and decide, "Is this going to work for me?" But there's ongoing conversations that I'll have with sponsors, and let them know, "This is what I'm looking for." And that, I think, will help them understand how they're going to craft their class shares.
Ash Patel: Can you give us a real-world example of how a class share is carved out?
Sujata Shyam: Yeah. So with one of my current offerings, if you're going to invest 50,000 directly with the sponsor, there's going to be a seven pref, and then it's a 70/30 split. 70 to investors, 30 to the GP. And then once a 2x equity multiple is hit, then it goes to a 50/50 split. So that's what a regular LP would go if they went directly to the sponsor.
Ash Patel: 2x multiple over how many years?
Sujata Shyam: They don't actually specify that in the waterfall.
Ash Patel: Okay, so it can take 10 years to double your money.
Sujata Shyam: And then it would go to a 50/50 split, yes. But part of this is also looking at the sponsors track record, and how they're actually performing, what their investment philosophy is, and what they're trying to do, and what you believe they're going to do. And in this case, the sponsor - they really like quicker exits, and they're exiting their deals historically in one to two years. And that's just been the last few years, and so I don't know what it will be going forward, but that is their preference.
So that's the thing with a lot of these deals, is that there's what the legal documents say, but then what I do is I try to really understand the sponsor's investment philosophy, and what it is that they want to do, and what kind of relationships they're trying to build with their investors. So then, ultimately, I am making a bet, and I'm making a guess, and I'm inferring, "I think this is what's going to happen, and I'm okay if it doesn't happen."
So I just went over the $50,000 class investments. So for the $500,000 class shares, what they'll get is they get an eight pref instead of a seven pref. And then it's a 70.30 split. And then there's no secondary hurdle. So it's just a 70/30, split to that $500,000 class share. So that is how I get compensated, is because we're getting a bigger piece of equity. So most of my compensation comes on the back end, and then I think that's proper, because that creates proper alignment of interest, where my interests are very closely aligned with the interests of my investors. And I'm in it for the long game. And yes, I need to keep the lights on, and it needs to make sense in the meantime, so we structure it so we'll raise a little bit more; instead of 2 million, we'll raise maybe 30, or 40, and that way we can take some acquisition fees, pay for our legal fees, and our accounting fees, etc. And that way, I'm able to continue operating the business. But still, the bulk of my compensation comes when we exit the deals.
Ash Patel: Interesting. So you negotiated 100 basis points higher on the pref, and the 70/30 remains. They miss out on the 50/50 waterfall - is that right?
Sujata Shyam: The GP would miss out, yeah.
Ash Patel: Oh, the GP misses out. Okay, got it.
Sujata Shyam: Because we're still gonna get 70/30 the whole time.
Ash Patel: But you're getting 30 of that 70/30.
Sujata Shyam: No, we're getting 70.
Ash Patel: Ah... In my world, we do things a little bit differently. Our deals are typically flip-flopped. We do a much higher pref, and then it's 70/30, with 70 in favor to the GPs.
Sujata Shyam: Got it. Okay.
Ash Patel: Sorry, I had to readjust for a second. Okay. Interesting. Also, you don't have to step down to 50%. You stay at 70.
Sujata Shyam: Yeah.
Ash Patel: So you negotiate some really favorable terms for bringing a higher amount of capital to deals.
Sujata Shyam: Yeah.
Ash Patel: And then out of all of this, you mentioned the acquisition fee for you and your company. How else do you get compensated on the back end?
Sujata Shyam: Well, that is how we get compensated, is we create another waterfall. So even though our fund is getting that 70/30 split until the end and we don't have that step down to 50/50, we create another waterfall, so then our investors are getting a seven pref, and then maybe it's a 90/10 split. So that way we're able to capture, and we kind of model it out so that our investors are getting what they would get if they went directly to the sponsor. That's the goal, and that's our intention, and that's how we try to make it... And then we're getting maybe a 10% of what comes to the total fund, or so.
Ash Patel: And then do your investors invest in one property at a time? Or do you have it set up where your fund invests in multiple properties?
Sujata Shyam: So that's something that I'm playing with and thinking about. Up until now, it's been on a deal by deal basis. Of course, sometimes one of those deals might have been on like an 18-property self-storage portfolio, so we were all getting diversification. But in this current deal that I'm doing, I have combined two properties from two different sponsors, in two different cities. So that way, my investors are getting diversification across different markets, sponsors and asset types. So like a B+ property and a B property.
You have to be very careful about how you do this... And in terms of creating a fund that's a blind fund - I have not ventured into that area yet, and I don't have any plans to at this time. So if I'm going to do a multi-asset fund, it's going to be pre-selected deals, so my investors already know which deals I'm purchasing.
Ash Patel: Alright. Another question that I have is have you ever had investors either lose money or not meet the anticipated returns?
Sujata Shyam: So far, we have been meeting or exceeding projections, except there's one property that we're in that we haven't been a full year yet, so we will see how that happens. There's been one property that we've had that the refinance is taking a long time, and so we haven't issued any cashflow yet. It's been about seven, eight months or so. And the refinance should complete now, and hopefully it will start cash flowing and catch up, so that we will meet projections... But that's the one I think that hasn't sort of been meeting the expectations that were set forth. But I'm not concerned about it in the long run. It is something for me to consider as someone who's explaining these deals to folks that sometimes there may be a sponsor who chooses to -- rather than return reserves, they're choosing to find the right debt partner. In this case, it's that over a dozen properties, and so the refinance is a little bit complicated. So it's taken some time to get it done.
Ash Patel: Are there some market forces at play, that add to the complications?
Sujata Shyam: With interest rate volatility... I don't think that's actually caused a delay yet, but I won't know for sure; it's supposed to close at the end of this month, so we'll see if the interest rate market will pose any additional challenges to that property... But it is a floating rate product, and we've locked in the spread, so I think it's going to go through. That's my best guess.
Ash Patel: Yeah. The reason that I ask is over the last 12 or so years it's been pretty hard to lose money in real estate. I've managed to do it somehow, but that's besides the point... So going forward, are you looking to temper the expectations of your investors?
Sujata Shyam: This is an interesting point, because when I kind of got back into syndications, it was 2019 or so. And back then it was the same conversation that we're having literally right now, because in 2019 people were thinking, "Gosh, well, it's been so good since 2014. Now we're going to have to pair back people's expectations." And so I think there's a gradual shift that happens in the marketplace. That's kind of what I've noticed, is that a seven pref became more of the norm that you would see. And return profiles - I still see people putting return profiles in large ranges. I do think that the sponsors who have been around a long time, since prior to 2008, I think that sometimes those folks do put in more conservative projections; they're projecting more like 12 to 15 IRR, rather than a 16 or 17 IRR. So they'll give themselves a range of expected returns, which I think is probably the wise thing to do, and it's something that I'm going to consider going forward.
Ash Patel: So you can share that range with your investors as well.
Sujata Shyam: I think so, yeah. Even if my sponsors are projecting like a 16%. I think it's probably wise. Of course, I would say that I'm still relatively new to the space in terms of the grand scheme of things. It's not like I've been doing this for 25 years. So I think that I might end up feeling like that's the wise thing to do. And the thing that I started to tell my investors is that investing should be boring. If you want excitement, take a few $100 and go to the casino. But investing should be boring, and getting base hits consistently is going to be more effective for building your wealth in the long term than getting a really sexy IRR or equity multiple in a short time. So that's kind of how I'm starting to train my investors to think, is that investing should be more boring than watching paint dry. We're not trying--
Ash Patel: I'm the opposite. Listen, I'm an impatient guy from Jersey; all I want is homeruns. I don't have the patience for base hits. So I wouldn't make an ideal investor, but I get it.
Sujata Shyam: I think that's fair for someone like you, because you're in the space and you are an active player. But I think for passive investors, that the reason I like real estate is because it's predictable, because it's less volatile than the stock market, and because over time, the results will be very exciting, even though it's not that exciting to actually watch it unfold. But that's actually a good thing, because it allows for peace of mind, it allows for that set it and forget it type wealth building.
So that's kind of what I'm sort of wanting to convey to my investors and help them have that mentality... Because people go into the stock market and I think they're like, "Oh, I'm gonna win big. This is gonna be so great, I'm gonna have all this money" and it can be a very volatile situation. So that's the reason I'm in this space, is because I don't want that volatility. I just want slow, steady, and then exponential growth over time.
Ash Patel: What's your typical investor profile? I have a couple of different folks that I work with. I work with people who are retired, and who are looking to just continue to put their money to work, and they've worked their whole lives, and they have accumulated some wealth... So they have a fair amount of money to invest and they're more comfortable investors.
I also work with people who are maybe in their 40s, who are hardworking professionals, who are looking to build that generational wealth, maybe not work as hard. Maybe they've been working 16 hours a day for a while, and they're like, "Okay, this has been great, but I want to work less. I want to become more work optional, so I want some passive income... And I also want to be able to make sure that I can give my kids enough resources so that they can have a leg up or not have to pay for their grad school" or something like that. And then the third type of person I work with is someone who's usually a female who's head of household, and she's done really well for herself in her career, but hasn't really focused on investing... So I can come in and help her fill out her investing portfolio and think about her wealth in the long term.
Ash Patel: Got it. What is your best real estate investing advice ever?
Sujata Shyam: I really believe that the best real estate investing advice which I've read before is don't wait to buy real estate, buy real estate and wait. There's obviously some caveats to that; you want to buy, and you have to pay attention to it, and you have to make sure that it's doing well... But getting started is just the most important part.
Ash Patel: Sujata, are you ready for the Best Ever lightning round?
Sujata Shyam: Yes, I'm ready, Ash.
Ash Patel: Alright, what's the Best Ever book you've recently read?
Sujata Shyam: The Best Ever book that I've recently read is Scaling Up by Verne Harnish.
Ash Patel: What's the Best Ever way you like to give back?
Sujata Shyam: I have two Best Ever ways. One is I volunteer with a youth mountaineering group and I help take high schoolers out on trips; so we go mountaineering, we go backpacking, etc. And I also like to donate. So every time we close a deal, we'll make a donation to a local nonprofit that's doing something housing-related.
Ash Patel: Sujata, how can they Best Ever listeners reach out to you?
Sujata Shyam: You can reach out through my website, which is www.luxe-cap.com. I'm also on LinkedIn, Sujata Shyam.
Ash Patel: Awesome. Sujata, thank you so much for spending time with us today, giving us your story, from not pursuing a corporate career, taking 100 days off initially which turned into 18 months off, and finding yourself in an incredible real estate career... So thank you for sharing all of that advice with us today.
Sujata Shyam: Thank you so much, Ash. It's been so fun to talk to you. Talk to you soon.
Ash Patel: Best Ever listeners, thank you so much for joining us. If you enjoyed this episode, please leave us a five star review, share the podcast with somebody you think can benefit from it. Also follow, subscribe, and have a Best Ever day!
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