Journey to Multifamily Millions

Why It’s Crucial to Have Alternative Investments in Your Portfolio with Keshav Kolur, Ep 107

August 15, 2024 • Tim • Season 1 • Episode 107

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🎙 Welcome to the Journey to Multifamily Millions Podcast! 🎙

Looking to dive into real estate investing and boost your financial game? You’re in the right place! 

In this episode, we chat with Keshav Kolur, a full-time real estate investor and the mastermind behind Clive Capital, a private equity firm based in New York City. Keshav’s been helping investors like you allocate capital to properties worth over $150 million!

Listen in as Keshav shares how he went from discovering real estate syndications on Reddit to running his own successful firm. We cover everything from due diligence in investing to the pros and cons of multifamily properties and other alternative investments.

If you’re curious about how to balance risk and reward or want to explore investment opportunities beyond the stock market, this episode is packed with valuable insights. Learn how to vet your investment partners, understand different asset classes, and uncover new ways to grow your wealth.

👉 Don’t miss out—subscribe now to get the latest expert advice on building your financial future with multifamily investments!


Episode Topics

[01:15] Meet our guest, Keshav Kolur
[02:10] Discovering Real Estate Syndications
[05:00] Starting Clive Capital
[08:32]  Investment Strategies and Asset Classes
[13:26]  Current Market Insights and Multifamily Outlook
[19:55] What is one red flag every investor should look out for?
[24:13] What is a myth about the real estate business?
[27:34] Connecting with Keshav



Notable Quotes

  • "We shouldn't just rely on one source of income; we should have other sources of income coming in." - Keshav Kolur
  • "Our goal is to help everyday investors build generational wealth through these alternative investments." - Keshav Kolur
  • "It's about finding the right solutions for the problems that they believe they have." - Tim Little
  • "Some people are just risk averse. So even if you think this one solution might be the best for them, if they're not willing to take that risk, then that's not the right fit for them." - Tim Little
  • "A great sponsor can take a bad deal and still make it work, and a bad sponsor can take a great deal and totally screw it." - Keshav Kolur
  • "If someone is just all about that appreciation, yeah, you could talk to them about a startup or some crypto thing." - Tim Little



👉Connect with  Keshav Kolur


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👉 Connect with Tim

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https://podcasts.apple.com/us/podcast/journey-to-multifamily-millions/id1634643497

[00:00:00] Keshav Kolur: When you get into this world of investing outside of the stock market, again, like I mentioned, it's Who you invest with that matters the most. So as far as figuring out who you're investing with, this due diligence checklist will help you really vet them and make sure they're the best person to put your hard money to work with. And it includes. About a hundred questions or so. Some of them are like, again, tell me a time when you failed, like when a deal went South, tell me what your experience is like. Tell me what your track record is like. What is your business plan? What is your investment thesis, et cetera. So I think for those listening, if take a read of those three materials, you'd be pretty well equipped to start diving into this world of alternative investments

[00:01:15] Tim Little: Hello everyone. And welcome to the journey to multifamily millions. I'm your host founder and CEO of ZANA investments, Tim Little. And on today's show we have with us Keshav Kolur. Keshav is a full time real estate investor and the principal and founder of Clive Capital, a private equity firm based out of New York city. Since founding Clive Capital, Keshav has helped investors allocate capital to seven properties with a combined asset value of more than 150 million. Keshav, welcome to the show. 

[00:01:45] Keshav Kolur: Thanks for having me on, Tim. It's an honor. I'm excited to be here. 

[00:01:48] Tim Little: Yeah, it's great to have you. And we did have a few technical difficulties, but we're going to power through.

So I know that you're a huge advocate of people moving into alternative investments. just like me, I try to preach that wherever I go. and we'll certainly get into that, but first tell us more about your background and how you got started on your real estate journey. 

[00:02:09] Keshav Kolur: Yeah, sure thing. So I graduated college in 2019, and went on a month-long trip to Southeast Asia with friends. So a 15 hour flight there one way, then there's flights in between the different countries and then the 15 hour flight back. Plenty of time. And so I read Rich Dad Poor Dad, which actually See now on your bookshelf. I didn't see during our first go around when we tried to record a few minutes ago, but red rich dad, poor dad, and the idea of being a business owner and investor, in addition to being a W2 employee really spoke to me that, the fact that we shouldn't just rely on one source of income, we should have other sources of income coming in. So when I got back, I studied to be a realtor, took my, and took and passed my exam on February 29th, leap day of 2020. Then as we all remember so fondly, a few weeks later, COVID shut everything down. When the markets opened back up later that summer in 2020, I sold a few homes and I was Looking at rental properties at that point. And luckily before I went too far down the rabbit hole, my roommate here sent me a Reddit thread where someone was talking about real estate syndications, their background, and the author's background of this post. They had previously owned 40 single family homes at their peak and realized, Hey, I want to get into apartment buildings. And he said that it was A lot easier and more profitable. So I thought to myself, buying apartment buildings sounds so much cooler than buying one home at a time, especially if it's more lucrative. So I reached out and got to know him, started networking, meeting a lot of the people that he knows in the industry, but also started doing research for myself, reading books, watching YouTube videos. Practicing analyzing investments because no one I knew was my friends or family or coworkers. No one had invested in anything except the stock market and maybe they owned a rental or two here, but no one had any private equity in their portfolio. And I thought, Hey, if this is higher, projected higher returns than the stock market, better tax benefits, lower risk. What am I missing here? Why are more people not doing this? Is this legitimate? So I took the next year to do my due diligence, but finally got comfortable, made my first investment as a passive investor into 108 apartments in San Antonio in September of 2021. And at that point, I started seeing cashflow come in, and started getting returns from the apartment building. Also got my tax. Form that showed that to me, at least Hey, the U S government's going to recognize this. This isn't a scam. And so I figured this is what I'm going to do for myself to set myself up, but it's no fun being financially free all alone, what am I going to do on the beach without my family or friends or, anyone else that I cared about, so January of 2022 started my company Clive capital, and our goal is to help everyday investors. Primarily tech employees, because that's my background as a software engineer at Amazon and Facebook, but really anyone who's along for the ride, builds generational wealth through these alternative investments. By achieving superior risk adjusted returns to building cashflow, which is that passive income we're all chasing after and three tax benefits, because taxes are one of our biggest obstacles to building wealth. And to that end, so far, we've helped investors allocate capital, like you said, towards seven. Maybe it's eight properties now I forget, but it's over a thousand doors and a thousand apartment units, I should say. And 500 single family home rentals that we have under development. And the goal is really to build a diversified portfolio for our investors outside of the stock market. So you have apartment buildings in their industrial warehouses. Some oil and gas drilling, some private lending, just a mix of different investment options, tailored to what the personal investor wants to achieve their personal financial goals. 

[00:06:31] Tim Little: I love that journey, it's very similar to mine. The first thing that I thought was interesting though is that you found out about syndications through red Reddit. That's the first time I've heard that usually the gateway drug for syndications is like single family investing or podcasts or something to that effect. So that's the first time I've heard of Reddit as, as an entree into this world but, and then, I think like most people do and what I often recommend too, is you did it yourself first, right? Hey, because you had the question that everybody has, which is this legit? Cause I don't hear a whole lot of people talking about this. So people's first instinct is to be suspicious, which I think is normal. but. you found out if it was legit by putting your own money on the line and getting into a deal in San Antonio, you said my first deal as an LP was also in San Antonio. So that's interesting. I was just a couple of years before you on that. And like you, I was like, okay, once that first check comes in and you're like, Okay, this is real. I'm actually getting something from it. So they didn't just run away with my money. that's the first thing.and then after that, then you get the K one. Okay. So the tax benefits are real now, not any, it just keeps piling on like that to where exactly like you said, you want to share that Hey, I don't know why this is a big secret. I don't know why other people aren't talking about this other than, CNBC, and Bloomberg tell you the only thing you can invest in is the stock market, but you want to let other people know about it. And I think that's why most of us either just start telling everyone or we start syndicating ourselves. and it sounds like you were pretty much in the same situation. you have certainly diversified. I think more than I have, I've dabbled in private lending, part of things like using my solo 401k to do that. So I felt like I could risk that, but talk to me a little bit more about how you and other investors decide which assets are best for which goals.

[00:08:45] Keshav Kolur: Sure thing. I think the four things that you have to balance out in my mind at least, are you, is the appreciation aspect of your returns, the cash flow aspect of your returns, and there's usually a trade off between the two. The higher your appreciation, the lower your cash flow, the higher your cash flow, the lower your appreciation usually. Third is tax benefits. And then fourth is risk to reward ratio. If we take multifamily, for example, that's the bread and butter of a lot of Alternative investors' portfolios, because it's a good blend of all of them where it's like the happy medium. And not too risky, but not too safe either. Returns are pretty good. Tax benefits are there. Then, some people obviously have a pretty high income that they want to offset a lot of, doctors, lawyers. people in management, they will start looking at the energy sector, for example, because in the oil and gas deal that I invested in, for example, every 100k invested, I'm not a tax professional, every 100k invested usually yields you about an 80k deduction on your taxes. Any kind of income that you make, whether it's w two, stock market gains, passive income, and in real estate, that's not the case, right? Either you have to be a real estate professional or your spouse does, but in energy, Again, oil and gas is my specific experience. Maybe it applies to other energy sectors as well, like renewables. So that's a big reason why people like energy and oil and gas, right? Then, you could have private debt, right? Private lending. That's a pure cashflow play. Maybe you're charging 12%, 15%. I've seen as high as 20%. So that's a pure cashflow play. then you have startups, for example, investing in early stage startups. You're going for all appreciation there, right? There's no cashflow, incredibly high risk, but if it works out, it's incredibly high reward too. And each of these investments carries their own risk to reward ratio. And it's just really, you have to tailor fit that to your personal approach to investing as an investor. Some people can take on more risk than others can. Some people want more tax benefits. Some people want more passive income slash cashflow. So it's really about figuring out what the right mix is for you. And I would also say throwing in. your interests and what asset classes peak your interest. Me, for example, I don't really see myself getting excited about self storage. Maybe that will change one day, but right now I'm really excited about multifamily. I'm excited about oil and gas. I'm excited about built rent, ground up development, excited about industrial triple net leases. So I think there's like a creative flair that you could add to it as well, where you say, Hey, maybe, apartments aren't your thing, but you really like self storage. So to each their own. 

[00:11:41] Tim Little: Yeah, no, I think that makes a lot of sense. And I think it speaks to what we have to do as syndicators, if we're talking to potential investors, it's to pull out. what their financial goals are and what their financial pain points are. Like you said, if you're talking to a lot of tech professionals, they're probably, and especially if they're in New York city, probably pretty high income. so, that tax liability is something that they're probably concerned about. whereas that might not be the case for someone else. And then of course, how much they're committing to these investments. You don't want someone putting like every penny they have into it and saying, Oh, I'm going to save up just to do this one investment. And okay. Sometimes you have to save people from themselves for sure. but it's about finding the right solutions for the problems that they believe they have. But you're right too, that it has to be aligned with their goals. risk tolerance. That's a big part of it because some people are just risk averse. So even if you think this one solution might be the best for them, if they're not willing to take that risk, then that's not the right fit for them. and if someone is just all about that appreciation, yeah, you could talk to them about a startup or some crypto thing, or, because again, it comes down to that balance of risk versus reward. so I think those are some really good insights. Yeah. And something for people to think about if they're listening to say, Hey, what are my priorities? What are my biggest pain points? If they write those out, they can have a much more productive conversation when it comes to talking to folks like you about what might be a good fit for them.

[00:13:24] Keshav Kolur: Exactly. Tim. Exactly. 

[00:13:26] Tim Little: Yeah. And so as we're talking about multifamily,things were pretty hot for a little while. And,I, it sounds bad to say COVID what the boom times are, but in terms of multifamily and appreciation, especially in areas where I'm at, like Tampa,where prices just skyrocketed, rents skyrocketed in turn. And so those properties increased in value tremendously based on that fact, that has since cooled down, in most places, every, I will caveat that with saying, all real estate is local and, some markets are still growing. Rents are still growing across the nation. In general, rents are still growing. are leveling off and occupancy is going down. Those are the general trends. I'd be curious to see what you think of the current market and where you think it's going. And based on that, is multifamily still the best play or are you looking at some of those other things that you talked about, which still are big, like warehouses and others.

[00:14:31] Keshav Kolur: Yeah, I think multifamily is a timeless investment and, only I wish I had a crystal ball to tell you. I think we're, we have seen some distress already. I think there's still more to come as I think it's been two years, maybe a year and a half since rates have been significantly higher than they have in the past decade. So I think a lot of that pain is still to come where maybe right now lenders are. Maybe they've extended it for a bit. Maybe they're trying to work out a solution, but eventually, again, depending on how high rates, how long rates stay high for, like they might just have to throw in the towel. and also the other thing is, I saw this on my LinkedIn feed the other day, a lot of syndicators are new. I think 70 percent of syndicators are within the, like the past five years or something like that. So it's going to take time for the pain of higher interest rates. A higher supply also rents are softening across the country, more supplies coming on than we've seen in the past few years to all that combined, if the underwriting doesn't pencil out, because these newbies were putting in very aggressive rent growth assumptions and exit cap rate assumptions, I think that's going to take time to play out. And that's. The nice thing with kind of real estate and private equity is things move a lot slower. So if you're analytical about it, you can stop, do your homework, talk to folks who are smarter than you, then you can stay prepared and stay educated about, Hey, I'm going to be ready in six months when I think, things are going to get really good. And there's going to be a lot of deals. I think there's more deals to come. I think there is more pain to come to the real estate sector, but then even broadly just in the economy in general, like we're seeing all these retailers close down shops like dollar tree. And, I think I read Walgreens too, and then, layoffs are still happening, consumer savings from COVID when they peaked, like they've basically been eradicated. and then most recently, an interesting stat that I saw was that. Not stat, but the fact that I saw was that Domino's didn't issue any forward looking guidance for their investors on what the future quarter could look like. Are more people gonna order pizza? Are fewer people gonna order pizza? and that's like consumer spending, right? And we know consumer spending drives the economy. If stuff gets really bad, people are gonna have to downsize. So I think if you stick to workforce housing, then you'll be better insulated than most people, but everyone's investment is going to take a hit. It's just how much of a hit it is going to take. Is the question. And I still really think the multifamily industry is really great about triple net leases specifically because the rents are baked in already, right? And you have annual price escalations to keep up with inflation. All the expenses are on the tenant. And as long as you do your research and make sure the tenant's not going to go out of any business is not going to go out of business. Their credit risk is really the biggest and maybe even the only risk in the deal. Oil and gas, I do like also just because of where we are as a civilization, our energy demands keep growing. We see grid outages all the time, especially in Texas And renewables just aren't keeping up, so the more ways you can be diversified into a lot of these things. The better, I would say, but yeah, I'm not giving up on Emily.  

[00:18:30] Tim Little: Yeah. And I think I hear that a lot from obviously a lot of multifamily folks. but I think it's for good reason, right? there's the cliched argument that everyone will always. i need a place to live. but that's more so the case when people can't buy houses, which is the situation that we're in right now. And we will continue to be for some time, even if one wants to make the argument that rates will come down, which they probably will, but it won't be by much and it won't be very fast. As soon as those rates come down, there's going to be a flood of people who are going to go into the market thinking, Hey, here's my chance to buy a house. And then supply demand prices will go up and a lot of more people will be priced out of the market and they'll have to stay somewhere. So they're probably going to continue staying in mom and dad's house or renting whatever the case may be. Multifamily is not going away now in terms of, rents softening and stuff like that. Sure. There's the argument to be made there, but in terms of longevity, I think it's looking pretty good, especially with the challenges in the single family housing market right now. all I can sit here and talk, micro and macro economics all day. I would love to, but we do need to move on. so I'm going to move on to the turbo round right now and ask you the three questions that I asked every guest we have on the show. Are you ready? Hit me. All right, the first one, what is one red flag every investor should look out for?

[00:19:59] Keshav Kolur: Oh man, there's so many, but I would say a lack of track record is probably the biggest one. Whatever investment you're making, whatever business venture you're going into, the number one The most important thing is the people, I always like to say that I'm not going to take credit for this, but this what I'm about to say, but a great sponsor can take a bad deal and still make it work, and a bad sponsor and experienced sponsor can take a great deal and totally screw it. So I think a lot of it comes down to primarily who are you working with? And so red flags there, like questions you should be asking are. How long have you been in business? Have you ever had a deal go bad on you? Like ever go South. I feel like if someone hasn't had a deal go South on them in any way, then they haven't been in business long enough. And that might be like a pretty easy red flag. Cause you want experience. If you're going to park your hard earned money, your friends and family, hard earned money with this person. You want to know that they know what they're doing. I would say that's one big thing then, obviously I would say if they make I agree with the statement that we were just talking about that everyone needs housing, but at the same time, I think that does get overused a lot, right? vacancy is still a factor to consider rent growth. It's not just as simple as saying, Hey, people need this. It's what is supply and demand. What's the underwriting looking for things like that? So maybe that's a red, another red flag. People are like overusing that as a justification. As long as I love and agree with the saying, 

[00:21:20] Tim Little: right? And by itself, it doesn't mean a whole lot, but that's why you have to back it up with facts, data for that specific deal, right? Like you can't just say it and be like, Nope, it's good then. No, it's Hey, In this market, we see the population growth going from here to here over the past many years. We see companies moving in and putting their headquarters in this city. And from that, we can write, bring some kind of data to bear on it. Otherwise it is just a cliche at that point. and then I'm going to hit you on this question. Because I find it interesting because we talked about the challenges that a lot of multifamily syndicators are facing right now and will be facing in the next couple of years, and you pretty much answered this, but I was going to ask if you know of Lemish on their record. Is that something that disqualifies them or if they had that tough deal and brought it out, got that investor's money, made them whole, even if they didn't get them the returns that they had forecasted, is that a plus or is that a negative, as you're vetting syndicators? 

[00:22:26] Keshav Kolur: Yeah, that's a great question. no one's ever going to have a perfect record. Everyone's going to have a deal where they. underperformed best case preserved investor capital or even lost some investor capital like that, is going to happen unless you're like, I don't even know, investing into just bonds or something, for some reason, if that's your syndication plan. I would say that, one of Warren Buffett's rules is number one, protect investor capital, something like that. And then part of the principle and number two is. Oh, no, it's number one, never lose money. Number two, don't forget number one. 

[00:22:53] Tim Little: Right. 

[00:22:53] Keshav Kolur: And so I'd say protecting investor capital is paramount. I would say even over trying to hit the returns that you projected at least mitigate the downside. I think humans are conditioned to be very risk averse rather than attracted towards the reward. If someone were to say, Hey, would you rather win 50 grand or lose a hundred? And there were some probabilities attached to it. People would probably error, maybe I presented that wrong, but people don't like losing money. Like them, they would have to preserve money rather than going for that extra 20 percent or 25%. I think it comes down to how the sponsor group handled that event. Tough times, black Swan events are always going to happen. And again, everyone's always going to have a few losses on the books, but it's, One, one, how did they get into that situation? Is this something they could have prevented? And then two, not even, maybe there's more, but once they got into that situation, how did they handle it? How did they communicate to investors? And then three, what did they learn from it? how are they going to change their approach, their business plans going forward? So I would definitely say don't knock someone just because they have a blemish on their record. Everyone does. Everyone loses games. People lose, in sports all the time, people lose in investing overall. The trend should be positive. And again, the company, the team should be growing and learning from these experiences. 

[00:24:09] Tim Little: Yeah, I agree 100 percent with everything you just said. All right, next one. What is a myth about this business that you would like to set straight? 

[00:24:16] Keshav Kolur: That is a good one. I would say, I think it's, maybe it's not a, no investment returns are guaranteed and there's always going to be some risk involved. Initially, people get into this alternative investment space. Everything's You know, unicorns and butterflies. Oh, the returns are looking great. I'm getting my tax benefits. What could possibly go wrong, but things can go wrong all the time. And you should expect that they will go wrong on some of your investments. And maybe that's my myth that I want to bust is that you will never lose on an investment. You will definitely lose on some investments, every 10, maybe you'll lose on one or two. no one wants them to happen, but they're going to happen. As long as one, the same thing that I just said, right? As long as you're winning more than you're losing significantly. And then you're learning from the losses. If you invest in a deal and it didn't go well, analyze for yourself, Hey, in the future, as a passive investor, what could I have seen that could have prevented this? Was it That the sponsor group was too inexperienced. Should I have gone through the underwriting more? Should I have reviewed their business plan more? So I would say you're going to lose, just be prepared for it. And don't let that fear prevent you from taking any action. It's totally normal. You're going to fall a few times before you start walking. And then even when you start running, you're going to fall a few times. So just dust yourself back up and learn from it rather than shying away. 

[00:25:33] Tim Little: Yep. All right. And the last one, what does success look like to you? 

[00:25:37] Keshav Kolur: Yeah, I would say the three things that I try to optimize my life for are one health, The one thing I love is that I try to remind myself every day to be grateful as a healthy man has a thousand wishes and unhealthy man has one wish to be healthy. And that's one thing that I try to optimize for. Another is obviously the people in my life. Like I said, it's no fun being financially free alone, right? You need friends and family. And I feel like that's what makes me happy. Living with the people around you, family, friends, anyone else you're able to positively impact And then third is obviously the financial aspect of it. So I would say thinking along those lines, one, I want to stay healthy. That's the goal. That's what success would look like for me. Their relationships, just keeping positive. Really good relationships, meaningful relationships with family and friends, carving time out for them, even though business investing obviously takes a lot of time, but never forgetting why you're doing it. And then one day like transitioning towards the third point, having the freedom to just. Spend time with your family, spend time with your friends without any sort of constraints. Hey, I can't pay for this flight ticket, or I can't, work is too busy. Just having the freedom to spend time with the people you care about. And as far as financial success goes personally, I think financial freedoms, number one milestone for me along the way. And then after that, and the two businesses I'm involved in at Clive capital with the fund management may be just hitting like. helping thousands of people achieve financial freedom by helping them invest outside the stock market into a lot of the alternative investments I mentioned. And I'm also a partner at, legacy acquisitions, a built to rent ground up development company. And they're just putting up like thousands of homes every year for people to live in. Because I think housing After food and water is the third most important thing we need. So to be able to provide that to other people would be a great thing to be able to achieve.

[00:27:25] Tim Little: Yeah, that's awesome. All right. Keshav , you have given us a lot to think about. Please tell our listeners how they can get a hold of you. And if there's anything else that you'd like to share with them. 

[00:27:34] Keshav Kolur: I would definitely say two ways, LinkedIn, definitely. I'm most active there. Just if you search my name, Keshav Kolur, it's luckily that's one of the pros of having a unique name is, not many other people will be confused with you. The cons are that your name is difficult to pronounce. And I would say second is check out our website. It's Clive cap C L I V as in vampire e c a p.com forward slash alternative dash assets, my business partner and I, we have put together educational material. The series. Of, three materials. One of them is a two pager that kind of talks about why you should be investing outside the stock market. Like a quick ten minute read. It goes into data about, hey, what are ultra high net worth individuals doing? What are the benefits of investing outside the stock market, etc. And then if you really like what you read and you want to learn more, you can download our ebook, which is more like a 30 minute read, but with even more data, even more numbers to really convince you that this is something worth looking into. I mentioned, it's Who you invest with that matters the most. So as far as figuring out who you're investing with, this due diligence checklist will help you really vet them and make sure they're the best person to put your hard money to work with. And it includes. About a hundred questions or so. Some of them are like, again, tell me a time when you failed, like when a deal went South, tell me what your experience is like. Tell me what your track record is like. What is your business plan? What is your investment thesis, et cetera. So I think for those listening, if you take a read of those three materials, you'd be pretty well equipped to start diving into this world of alternative investments.

[00:29:15] Tim Little: All right. I appreciate you sharing all those resources with our listeners. We'll definitely have all that information in the show notes, but right now I want to thank you for coming on. I appreciate you being here and sharing your experience. And I continue to, I want, I look forward to continuing to see you do big things on your journey to multifamily millions.

[00:29:35] Keshav Kolur: Thanks so much, Tim. It was an honor to come present and hope that I was able to provide some value. Absolutely. Thanks.

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