Average Joe Finances

Ep 52 - From Humble Beginnings, Immigrating to the US, and Investing in Multi-Family with Prashant Kumar

July 25, 2021 Mike Cavaggioni Episode 52
Average Joe Finances
Ep 52 - From Humble Beginnings, Immigrating to the US, and Investing in Multi-Family with Prashant Kumar
Chapters
Average Joe Finances
Ep 52 - From Humble Beginnings, Immigrating to the US, and Investing in Multi-Family with Prashant Kumar
Jul 25, 2021 Episode 52
Mike Cavaggioni

Join Mike Cavaggioni and Prashant Kumar on the 52nd episode of the Average Joe Finances Podcast to discuss why it is never too late to invest in real estate and how to get started. Prashant is the CEO and founder of My Realty Gains. Here, he assists ultra-busy professionals in identifying excellent investment opportunities, providing stable cash flow, and long-term capital appreciation by purchasing assets. Not only that, Prashant has acquired and managed over $32 million in real estate while running webinars and meetups, speaking on the subject of investing across the country. Today, he shares his journey, from immigrating to the United States to now investing in multifamily.

 In this episode, you’ll learn:

●     How “assisted living” works and what goes into managing such properties

●     The abundance mindset and how helping others attracts more wealth

●     Ways to use your IRA to invest in different asset classes, including real estate

●     The importance of taking things slow when learning to invest in any asset class

●     How to build generational wealth from the compounding effect of passive cash flow

●     And much more!

 
About Prashant Kumar:

Prashant Kumar is an enthusiastic, passionate, and goal-oriented multifamily operator. He applies his 25+ years of experience in corporate America to analyzing income and expenses, calculating Net Operating Income (NOI), and calculating purchase prices based on NOI and Market Cap rates. Prashant acquires and holds stable, income-producing multifamily apartment complexes in emerging US markets with long-term capital appreciation. He runs meetups in NY and online masterminds with many groups while doing JV and syndication deals. In addition, Prashant has a passion for purchasing Assisted Living Properties.

Find Prashant Kumar on: 

Website: www.myrealtygains.com

Multifamily Realty Gains: www.multifamilyrealtygains.com

Personal Loving Care: http://www.plccarehomes.com

LinkedIn: www.linkedin.com/in/prashant-at-myrealtygains

Facebook: https://www.facebook.com/prashant.myrealtygains

Check out Average Joe Finances:

Our social media links can be found here: https://averagejoefinances.com/links

🌐 Check out: https://averagejoefinances.com

⚖️ Balance Your Portfolio with Passiv: https://averagejoefinances.com/passiv

🏡 Buying or Selling a House? https://averagejoefinances.com/realtor

🏘 Interested in getting your real estate license? https://averagejoefinances.com/prepagent

🎥 Use the same Audio/Video editing team that I use: https://editpods.com

📋 Social Media Management Tool: https://averagejoefinances.com/social-media

 

💰 Free Stocks:

Robinhood: https://averagejoefinances.com/robinhood

Webull: https://averagejoefinances.com/webull

 

📋 Consolidate debt: https://averagejoefinances.com/sofi-loans/

⚠️ Life Insurance: https://averagejoefinances.com/ladder

☕️ Support the Podcast/Channel: https://www.buymeacoffee.com/avgjoefinances

💎 Average Joe Finances Swag: https://averagejoefinances.com/resources/shop

🚧DISCLAIMER 🚧 https://averagejoefinances.com/disclaimer

If you are interested in writing for Average Joe Finances or joining us for an interview on the podcast, please visit https://averagejoefinances.com/contact
--------------

Tropical Sensation by Mike Leite https://soundcloud.com/mikeleite Creative Commons — Attribution 3.0 Unported — CC BY 3.0 Free Download / Stream: https://bit.ly/-tropical-sensation 

Support the show (https://www.buymeacoffee.com/avgjoefinances)

Show Notes Transcript

Join Mike Cavaggioni and Prashant Kumar on the 52nd episode of the Average Joe Finances Podcast to discuss why it is never too late to invest in real estate and how to get started. Prashant is the CEO and founder of My Realty Gains. Here, he assists ultra-busy professionals in identifying excellent investment opportunities, providing stable cash flow, and long-term capital appreciation by purchasing assets. Not only that, Prashant has acquired and managed over $32 million in real estate while running webinars and meetups, speaking on the subject of investing across the country. Today, he shares his journey, from immigrating to the United States to now investing in multifamily.

 In this episode, you’ll learn:

●     How “assisted living” works and what goes into managing such properties

●     The abundance mindset and how helping others attracts more wealth

●     Ways to use your IRA to invest in different asset classes, including real estate

●     The importance of taking things slow when learning to invest in any asset class

●     How to build generational wealth from the compounding effect of passive cash flow

●     And much more!

 
About Prashant Kumar:

Prashant Kumar is an enthusiastic, passionate, and goal-oriented multifamily operator. He applies his 25+ years of experience in corporate America to analyzing income and expenses, calculating Net Operating Income (NOI), and calculating purchase prices based on NOI and Market Cap rates. Prashant acquires and holds stable, income-producing multifamily apartment complexes in emerging US markets with long-term capital appreciation. He runs meetups in NY and online masterminds with many groups while doing JV and syndication deals. In addition, Prashant has a passion for purchasing Assisted Living Properties.

Find Prashant Kumar on: 

Website: www.myrealtygains.com

Multifamily Realty Gains: www.multifamilyrealtygains.com

Personal Loving Care: http://www.plccarehomes.com

LinkedIn: www.linkedin.com/in/prashant-at-myrealtygains

Facebook: https://www.facebook.com/prashant.myrealtygains

Check out Average Joe Finances:

Our social media links can be found here: https://averagejoefinances.com/links

🌐 Check out: https://averagejoefinances.com

⚖️ Balance Your Portfolio with Passiv: https://averagejoefinances.com/passiv

🏡 Buying or Selling a House? https://averagejoefinances.com/realtor

🏘 Interested in getting your real estate license? https://averagejoefinances.com/prepagent

🎥 Use the same Audio/Video editing team that I use: https://editpods.com

📋 Social Media Management Tool: https://averagejoefinances.com/social-media

 

💰 Free Stocks:

Robinhood: https://averagejoefinances.com/robinhood

Webull: https://averagejoefinances.com/webull

 

📋 Consolidate debt: https://averagejoefinances.com/sofi-loans/

⚠️ Life Insurance: https://averagejoefinances.com/ladder

☕️ Support the Podcast/Channel: https://www.buymeacoffee.com/avgjoefinances

💎 Average Joe Finances Swag: https://averagejoefinances.com/resources/shop

🚧DISCLAIMER 🚧 https://averagejoefinances.com/disclaimer

If you are interested in writing for Average Joe Finances or joining us for an interview on the podcast, please visit https://averagejoefinances.com/contact
--------------

Tropical Sensation by Mike Leite https://soundcloud.com/mikeleite Creative Commons — Attribution 3.0 Unported — CC BY 3.0 Free Download / Stream: https://bit.ly/-tropical-sensation 

Support the show (https://www.buymeacoffee.com/avgjoefinances)

Mike Cavaggioni:

This is Average Joe Finances podcast episode 52. If you're watching this on YouTube, make sure you smash that like button and click subscribe. For those of you listening on a podcast platform, be sure to subscribe on whatever platform that is, and leave us a rating if you can. The more likes ratings and subscriptions that we get, the more we can spread the message and grow our community. So we also have a free Facebook group. It's called the Average Joe Finances network. Check us out, join the group, join the community ask questions, and to come up part of the team. All of our other social media accounts are listed in our flow page. And we have them in the video or podcast description below.

Prashant Kumar:

And the important thing is be blessed that you've read it now now means now is the right time to get it there is no tomorrow by glad that you get this equation right now in your head and start acting upon it.

Average Joe Finances:

Welcome to the Average Joe Finances podcast. Are you trying to get out of debt, invest or just not sure where to start? Then this is the place for you. We discussed different ways to get out of the rat race and build your wealth. Join us on this wild ride to financial freedom.

Mike Cavaggioni:

Alright, hey, how's it going everybody? So today our guest is Prashant Kumar, and He's the owner of my realty gains. His passion is to assist the ultra busy professionals and identify great investment opportunities to provide stable cash flow and long term capital appreciation by purchasing those assets. Prashant has acquired and manage over $32 million in real estate and Prashant has also appeared in many podcasts, and he runs webinars and meetups. He also writes blogs on real estate investing and speaks on this subject across the country. So Prashant really humbled that you that you're coming on the show with me today. Thanks for joining us.

Prashant Kumar:

Mike, thanks for having me. Honor is all mine that you are in you have invited me. Alright, awesome. Well, hey, thank you for that, you know, it's with with your background and everything that you're doing. And also, you're from pretty much my hometown, the next town over over there in Ronkonkoma. I'm from Central Islip, New York. So it's really cool to talk to somebody back in the 631 that knows what good bagels and pizza tastes like, That is correct. You know, I can I can imagine, you know, if you are from this area, you must have eaten pizza, you know, at the place, which you told me about? Oh, yeah, a little bit. It's my favorite spot. So awesome. So, hey, so uh, besides your background, I'm gonna go ahead and start this off the way I like to start all my podcast is, you know, we'd like to know a little bit more about you. So besides what I just talked about, what can you share with us about your story, what what it all start For you see, I'm almost full time real estate, investor and syndicator. I come from a very humble background. You know, I come from India, of course, I came here in 1998. And ever since, you know, I've worked in corporate world. And the one thing I have realized is, you know, when I'm working, I'm getting paid. And when I don't work, I don't get paid. So it's like trading your time, you don't realize it in the earlier part of your career. And it's almost a blessing for those who, who are realizing it now, that if you are trading your time for money, you are you are going to be without money when you are not working. You know, it is almost a blessing to realize that at an early stage, for me, it happened at a later time in my career, almost after 20 years. In my corporate world, you know, I manage people all over the world. And I do in a lot of big things. But when I don't work, I don't get paid. So I had to get into something where you know, where I'm making money even when I'm sleeping? You heard all everybody's saying that, you know, if you're not, if you're not making money while you're sleeping, you will be working till your till you die. Right? So right. Warren Buffett said that, so it kind of stuck to me. And at the same time, I wanted to get into something which is more fundamental, right? What the basic necessity rather than reinventing the wheel. I wanted to get into tangible asset. What are the basic needs of human beings in abroad, shelter and food 30 things right? I mean, I'm not going into clothing business, I'm not going to food business so I said let me get into real estate because nobody can snatch it from me. It is it is a real asset real tangible asset. And it always grown. You know I've seen it years or years 2030 years it always as long as you you do it correctly, in that I realized that I should get into real estate I started doing some single families, but then I immediately jumped into multifamily. No like right away within six months I realized that single family is not my cup of tea, even though I bought please and grow families. Six months, I realized it's not worth my time because all I get our I was getting was 100 $200 from one single family investing too much time for me to purchase. I bought one multifamily condo unit in 18 days, and I was like mine, you know, and I started getting like $2,000 cash flow out of it right away. So that kind of opened me up into multifamily. And it's not just I do it for myself, you know, at some point you realize that yes, you are doing it for yourself, then I went into syndication, the basic idea is, you know, I get into this I got into these businesses I you know, yes, I'm making money, but at the same time, I am helping others also to make money, the lot of people who are who have a lot of money and they do not have time to manage that money, right, they give it to a financial advisor, or what happens a financial advisor makes more money on their money, and they end up getting five 6% or even less, you know, or a period of time, multifamily syndication is a is a business in which you are we I mean, the investors get almost all the returns, you know, not not 100% of course, almost all the cash flow investors get and towards the end, the split happens, you know, 7030 or 8020 investors are able to make as much as 15 to 20% return on their money analyzed. And we with To me, it is no brainer, I invest my money with other syndicators all the time, I mean, all the time, because I want to create at least 10 15% return on my money. And this vehicle gives me that capability. If I do a syndication deal, I'm able to create that much return for my investors. And not just investor, my friends, my family, everybody, you know, it's not just, you know, I have a relationship with investors, those who are my investors are my family, my sisters, my brothers, you know, everybody in the family invest with me. And, and they, they just love it, you know. So overall, overall, I mean, that is my background, I come from a very humble background, as I said, my basic idea is to help. That's why I'm into multifamily, where I'm helping the busy professionals at the same time, I'm into assisted living also. So I'm trying to help elderly people, money will come but but the bottom line is I'm trying to create an environment from for elderly, I'm creating an environment for for those elderly folks, when they come into our facility, they extend their lives in less than one hour. And I'm trying to create for them. In addition to that, I mean, I'm into meditation, also, I spend a lot of time helping others to gain peace. And that is all free of charge. So from three different level, you know, I'm, you know, I am trying to give back to the Lord.

Mike Cavaggioni:

Wow, I really like that. That's, that's commendable. And so actually, I want to ask you something, before I get into the other questions I wanted to ask, but so the assisted living. So how does that work? So do you hire like, medical professionals or caretakers that will work in the property that you purchased? So you're, you're acquiring the asset, right? And then you convert it to make it more something that's easier for to put the proper equipment in, right, like Life Care equipment, and things like that. And then you hire a crew, like how does that work

Prashant Kumar:

So assisted living is primarily you know, it's not a nursing home, right? So you don't have the medical facility there. It is a place where the elderly come and live with you live in that facility. So you don't have medical equipment. So to say you will have basic equipments very basic stuff, there's nothing, not we are not we do not administer we only administer prescription drugs we do not administer anything else. So we hire him we hire a management company. And the management company hires their staff and they manage the manager show from our perspective we are we are the investors but I'm in return we manage them to is not that we just hands off, we don't talk to them. We end up spending a lot of time with them. We come up with a strategy to decide what is good what is best what is bad overall. So it it is it I don't know. I don't do that work. Because I'm not a medical professional. I don't I don't manage those people. My management company manages them basically.

Mike Cavaggioni:

Okay, right on. Yeah. So for you it's it's still kind of the same thing, right? You're you're purchasing a piece of real estate, you're hiring a management company to take care of it and it's more it's more hands off for you. Right? It's still it's still pretty passive.

Prashant Kumar:

It is hands off, but you know, you have to manage them it is it is little bit hands, more hands on them multifamily, okay? The reason is, we notice a business you are running in multifamily, you, you signed the lease, give it to the tenant, and you don't have to talk to 10. And for 10 years, 15 years, as long as tenant is paying you the rent, right? And you also but here you are dealing with, you're providing service, you're providing care. So it's a business, you know more of a business and is operational intensive, you are providing necessary, you know, security, you are providing necessary, you know, changing the programs, you know, you are providing right food, you're planning right care, you are you are managing all the, you know, audits that happen all the time. So you are involved a little bit more, basically, it is not hands off, you know, and let me tell you that I mean, okay, yeah. Yeah.

Mike Cavaggioni:

All right. Right on. Well, thank you. Thank you for sharing that. I've been curious about that. Because I know other people. I went to a real estate meetup and OPIC that evening was assisted living. So we actually had somebody who is very big into assisted living, come out and talk to us. And he was actually looking to start investing out here in Hawaii. So I was kind of like talking to him about it. Just I just want to learn more. Very interesting stuff. So one of the things we talked about in your intro is the ultra busy professional. One of the questions I want to ask you, especially for somebody who's, you know, working in a, in a profession where they don't have too much free time, right? That's what we're considering ultra busy. How would they get started in real estate?

Prashant Kumar:

So you do it is pretty simple. Okay? What I tell is, if you feel that starting in real estate is owning a single family home, that is a very wrong conception, you really don't have to own an asset in your name only to be a real estate investor. Because the moment you own an asset in your name or in your LLC name, you become solely responsible of taking care of that asset by yourself. Which means that you become active it means you are taking the time of your family's time away. And investing into that. And many times for ultra busy professionals. It's not worth spending time on to these managing these assets basically. So what we say is guys, you look for good syndicators, syndicators who are able to produce better results for you, then even you don't get by yourself. Well, number one, you have to realize that you are not professional in real estate, those syndicators are professional real estate investors. Number two, any projects that they are doing, they are being watched carefully by sec. They are being audited by bank, they are being managed by professional property managers. If there's a fire in an apartment, I don't go there. My property manager goes there and does the work. But if there's a fire in my single family home, I would be running around like chicken without a head, right? You know, something happens? Absolutely. So the point the point I'm trying to say I can sleep in the night, even if I have 500 unit apartment complex, but I cannot sleep in the night. If I have a single family home. It's so easy. And the return generated by multifamily is much much more than single family returns. I can explain it day in and day out, I am able to generate returns, and I don't have to quote it but I not to lower it lower anybody. If I can generate returns as much as 40% annualized in five years, I can if I'm able to double the money in less than five years. There are other syndicators also who are able to double the money for their investors in less than five years. And that doesn't happen in single family, whatever you do, maybe you will have $100 cash flow. Maybe in the end you will have made some money. But think about how much pains Do you go through and on top of that these multifamily gives you so much of tax benefits, tax advantages, you know, it's literally passive investment. And and you think about if you if you let me give an example if one if somebody is able to save $50,000 per year from their job, so ultra busy professional must have a higher salary for sure, right 200 200,000 if they are able to save $50,000 and if they are able to invest that money in real estate So only 15% return accumulated last year, you invest that next year that becomes 57.5, you add another 50,000, you're investing 107.5, the following year, it becomes 120,000, more than 152,000. To be precise, you add another 50,000, the following year, it becomes 200,000. So next thing, you know, if you are just investing $50,000 per year, in 10 years, you are able to produce a passive income of $100,000 for yourself without lifting your finger. Let's listen to me clearly $50,000 per year saving, you continue to invest in real estate, if you are at 20, if you are ages 25 by the time you are 35, you will be able to produce $100,000 passive income in that time, it's up to you to and then then you are continuing to invest that further. Right. I mean, the sky's the limit? Oh, absolutely. At that point, you know, at that point is sky's the limit. I mean, you can continue to do your job always. But do you still continue? Can you do that in sheer market? I do not think there is anything any asset class in I mean, unless you think that, you know, you invest in a in a crypto which goes like 2000 times in a in a year. That's not what we're talking about that. And you read a resume the whole thing? Right. So Right, right. The point is 10 years, $100,000. income, I guarantee you, if you follow the simple steps, is almost guaranteed $50,000 $50,000 per year for 10 years and continue to invest in one syndication after another. Don't Don't keep your liquid money, you will be able to start generating $100,000 income passively. And you continue to reinvest that also. Then in our next five years, that income will become $200,000. So I mean, yeah, isn't that isn't that a great system? You know, you keep cutting the years down to as you keep investing that money.

Mike Cavaggioni:

So, you know, from the point where it took you to get to 100,000? It was 10 years. Now, five years later, you're 200,000? Yeah. And then another two and a half years after that you're at 300? Or, yeah, whatever. Yeah, I mean, yeah, till four years, three, four years, you become a 301. So that, so if you start doing that at age of 25, by the time you are 4045, you already have like passive income of, you know, two $300,000 rolling, isn't that I mean, I think that's the great concept, the passive income to have, yeah, you know, just to be able to go to sleep wake up and be like, Oh, yeah, okay. Yeah, you made 3000 this year,

Prashant Kumar:

Yeah, you can quit your job anytime, you know, I mean, I don't know about you, but when my my needs are very limited, I, if I have 100 $200,000 coming in, I'm gonna probably quit my job, you know. And, you know,

Mike Cavaggioni:

That's the goal is to build that passive cash flow, that that you can do what you want in life and have that financial freedom, right. So that's kind of that's, that's one of the ways to get there. And, you know, that's, that's a great way to go.

Prashant Kumar:

And the important thing is be blessed that you've read it now. Now means now is the right time to get in, there's no tomorrow, by glad that you get this equation right now in your head, and start acting upon it. If you are 25 start investing. Now, if you are guaranteed to start investing, even better now, if you are 45, you started investing Now, if you're 65 start investing now, there's no limit, but sooner the better. The sooner you absolutely, you know, if my father had told me this earlier, I mean, of course, he doesn't do it. He doesn't know anything about it. But the point is, if I know if I knew it sooner, I would have had, you know, you know, multibillion dollar empire for me, you know, I can guarantee guarantee

Mike Cavaggioni:

Absolutely. Yeah, you know, it's it's funny, it's like the the famous saying that you always hear that the

Average Joe Finances:

Let's take a brief moment to hear from our the best time to start investing was 20 years ago. The second best time is right now. Yes. So that that is definitely writing and you know, that kind of brings me to the next thing I want to talk about, which is like the what's the right mindset? What's the right attitude to have when it comes to investing in real estate? I know this is one of the topics that you want to discuss as well. show sponsors. What's going on everybody? So today I want to talk to you about the podcast editing service that we use for the Average Joe Finances podcast that is editpods.com and what I really like about them is it's a subscription based service. So the prices are fantastic. And not only do they do the podcast episodes for us, but they also make us videos audio Graham's social media caption videos, they do our show notes thumbnails, it's just fantastic products. Go check them out at edit pods.com Hey, what's going on everybody it's Mike Cav from Average Joe Finances, just want to talk to you today about prep agent. If you're interested in learning how to become a real estate agent, and being able to pass the test on your first try, check out prep agent, check out the link below in the show notes or in the video description. Let's get back to today's episode. You're listening to the Average Joe Finances podcast, whether it's single or multifamily real estate, the stock market or side hustles we discuss it all strap in and enjoy the ride.

Prashant Kumar:

This is an abundance mindset, you know, you think you can earn for yourself only that is wrong, you have to come up with a with a mindset where you are able to help others, the moment you open up yourself is you know, universe attracts that right? And you are you start getting a lot of help from others. So you have to open up and help others generously and lead and you will receive help back the mindset is yes, you will have money, continue to invest don't just you know, have a mindset that will I'm going to earn only for myself, help others people will become your friend, you know, when you make when you help others and they end up making money because of you, they become your best friends. So there was a book I was reading, not how right I need to know who can do this job, I should do it. So when you connect with people, people come with different different skill set. Everybody has a different skill set, I cannot achieve all the skill set myself. When you are helping others they become your advocates in your life. Today, I was asking for some underwriting help discussing with somebody. And next thing I knew there was an email Prashant, I like your stuff, I want to help you out in your underwriting, it was a complicated stuff that I was discussing with somebody in a meeting. And some some guy, you know, sent me an email, because I was open to share that information. Somebody reached out to me that I will help I mean, the guy is an underwriter. So what else do I want? So that's the mindset you should have. I mean, not just for yourself, for everybody, you know.

Mike Cavaggioni:

I really like that, you know, especially not just about helping yourself, you know, like what you're talking about that you you, you have this mindset to help others and, you know, help others, you know, build their wealth and, you know, just better themselves. Right. And I think that's one of the things that I really liked so far, you know, as I'm learning about multifamily and syndication, it's just, you know, you get the right group of people together. And, you know, basically you're pulling this money together, you're buying assets that, you know, that that really that that scale, right? It's like I've heard a lot of people say this before, today's you know, it's an economy of scale versus, you know, a single family home versus multifamily, your costs are a little bit less, right, because when you're fixing stuff you're fixing for the entire place, when you replace a roof on a multifamily. You know, you just replaced the roof for 30 units versus replacing a roof for one property. So just the little things like that, that add up in the long run, help you get that much more money back into your pocket. So that's, that's really awesome. So another topic that I had on here that I want to talk about with you is somebody you know, wanting to invest using their IRA, to invest in real estate. So how would somebody do that?

Prashant Kumar:

Super simple, you know, from my IRA, IRAs, you know, are created. I know a lot of us have IRAs with big brokerage firms, where we invest only in, in the vehicles which those brokerage firms provide us, right. And that is because of our ignorance, we think that I earn money can only be invested in mutual funds and stuff like that within those brokerage that is the wrong wrong, completely wrong concept. Ira can be self directed IRA, remember it IRA can be self directed, meaning that you can invest in any asset class from IRA except through things, you know, I don't even remember what they are, and I'm sure you probably would not invest in them, but you can buy gold you can buy, you can do whatever you want to do with your money because that's your money. So, you can open an account is called called self directed IRA. And then there are tons of companies just type as the IRA, you will find like hundreds of companies which can be your custodian and they give you have the freedom to invest that money into any asset class, including real estate, the only thing you have to be careful that you cannot invest in, you cannot invest in an asset which you manage by yourself. And you can you cannot invest into arm length transaction means nobody in your family's family side, your family side or your spouse's family side. You cannot give that money to them. Otherwise, then it becomes a disqualified transaction prohibited transaction. But that money can then passively be invested in in in real estate syndications. And, and the returns will come back to your IRA. And it is non taxable, of course, if it is coming from my going from my IRA, so return goes to IRA. And that's your choice. I mean, there are many, many vehicles, you can open IRA, you can open a company inside IRA, cut the check from there. And can even the better thing is solo 401k, you can, you can convert that IRA into a solo 401k. And from where you can invest in to liberals desert also. And it's getting more complicated, but solo 401k is the best vehicle if you have an IRA, convert that into solo 401k. And then you have a checking account sacrificed, you can invest from there into into any leveraged asset and still not be subject to UDF I unrelated debt financing attacks, you will not be subject to that. So solo for if you have to invest on my IRA, I would recommend that you convert your solo 401k as long as you get qualified. So look, look up for that onto the internet. And if you need any information, send me an email I can walk you through because it's a little bit more complicated than just talking in few minutes. But yes, you can invest into any asset class through self directed IRA or through solo 401k. Solo 401k, in my mind is a better vehicle.

Mike Cavaggioni:

Awesome. And I'll make sure I have your email address and stuff in the show notes too, for anybody that wants to reach out with those questions. So yeah, that's really awesome. And thank you for opening up like that, to allow folks to reach out to you. That's that's really

Prashant Kumar:

No problem. Yeah, no, I love it. You know, I love to connect with new people. I mean, you would have my email address, and please type in a please leave my phone number. Also, I would love to talk to anybody, you know?

Mike Cavaggioni:

Yeah. 100%? For sure. Okay, so I got another question for you. And this is more about. So we keep talking about how, you know, you get this passive cash flow with with multifamily real estate, and you're building your wealth. So how can you use that to build generational wealth for the future of your family, you know, for your children and your children's children? How can you utilize real estate to do that?

Prashant Kumar:

It is the compounding effect, you know, you it is the compounding effect, yes, you are an ultra, ultra busy professional, right, you are making two $300,000 a year and are on top of it, you started making another 100 200 $300,000 per year passively. So think about how much money you have coming in, not just from your income, it's all the investments are bringing all that income to you, plus your IRAs they are bringing into all the 401k that money that you are not paying taxes on, they are also generating the income for you. So the next thing you know, by the time you are 4045, you have a net worth is growing like doubling every three, four years. So it's a compounding effect by the time you are 60. I mean, I can put it in the spreadsheet and your eyes will you'll be blown away. How much money will you would you have at 65? Yeah, you're right. I mean, you're, I mean at a very, very humble level, if you're saving only 50,000 per year from your job and investing 18,000 20,000 in your in your 401k all that compounded by the time you are 6065 you will have you will have at least 10 $15 million in Europe if you are if you are saving $50,000 per year from the age of 20. And if we are saving 20,000 in your 401k that is what you are saving and you are compounding it by 12% forget about 15% if you're compounding it by 12% by the time you are 50 you will have at least $20 million in your account. So So isn't that enough generational wealth? Yeah, yeah, that's definitely gonna be enough to be helpful I think for the future your family, right? So are we you can create I mean, I'm trust me, you know, this is mesmerizing to me. I'm such a big advocate of start saving early, start investing early, sooner you start better it is for you for your life. On top of that, if you get into jump into real estate and you become a real estate professional, the depreciation that you are achieving, is wiping off your income. Right so so all this money you are making is without paying, I don't want to say a lot of taxes, you are reducing your tax liabilities in real estate. So all the money that you are making, I mean, and you know that the world our tax codes operate in such a way that it gives opportunities to buy more and more assets to real estate professionals. That's how our codes are written. It's not a loophole, all commercial real estate can be depreciated at a much faster pace within five to 10 years, you can appreciate 40% of the your real estate acquisition cost, or equity acquisition cost and within five to 10 years 40% I mean, what else we want, I mean, it's like you are making money and not not paying taxes. So you're 15% if you were to pay taxes on that, it, you know, it will become 9% or six 8%. But if you have to keep that whole 15% and reinvested and continue to reinvest it, I am tempted to create a spreadsheet and show you someday, in five years, in five years, if you are consistently doing real estate in five years, you can become a real estate professional. Once you become a real professional, the sky's the limit for you. sky's the limit for you. And and basically, you know, you can continue to grow that I mean, I'm gonna I'm already teaching real estate to my kids. Yeah, they are like, you know, they beat me in my in that game, you know, catalog game, you know, all the time, honestly,

Mike Cavaggioni:

It's great. You guys played? How old? Are you kids?

Prashant Kumar:

I mean, I played my son is is nine. My daughter is in high school? Of course. It's me for sure. Yeah, I've been playing with them for last, you know, I don't know how many years you know. So that's the mindset that we have to develop, you know?

Mike Cavaggioni:

Yeah. Right on. That's, that's fantastic stuff. So, okay, so speaking of real estate, right, and like, I want to talk a little bit about, you know, because we're talking about all the good things, but I want to talk about, like some things that you've seen gone wrong. So what what are some of the things that you've seen gone, like, go wrong in a deal, like, especially during a closing

Prashant Kumar:

All I can say is not everybody's same in this world, there are people who have not read in that sense many times, you know, so anything can go wrong. In my closing, there are hundreds of 1000s of things which can go wrong by the company may screw up, I mean, seller may have an open permit on the property. But you know, your bank may say that they're gonna raise the raise the interest rate, they may reduce the proceeds, they may be 1000, things that could go wrong, anything that you can think of can go wrong, during closing time, you know, you may not buy, you may not be able to buy rate cap lock, the company send the wire, the wire got screwed, your last investor did not send you the check, you know, somebody died, somebody was an offshore, they couldn't come come in to sign the document, that the UPS driver was coming to your home, ahead of tire puncture. So anything and everything can go wrong, you know, so I can talk about it. That's, that's a topic in itself, you know, anything can go wrong, then on top of that, your private equity guy who was willing to give you the money may choose not to give you the money at the last moment, that could go wrong. I mean, that happens all the time. That people in the world, yes, there are people in the world who may say that they are going to give you the money and they may fool you at the last minute, then you say okay, I was gonna give you the money at 9%. Now I want 1% just because he has not cut the check and you are hard. And and you don't have a choice. So you end up losing that money, you know, so there's a lot of things that could have could go wrong, just be prepared. important new experiences, finalize these things at least two, three weeks before closing? Is You never know. Yeah. And anything and everything, like you said can can go wrong. And if you're prepared for the worst, and you hope for the best, then when those things do go wrong, it's not going to bear this kind of I it has happened with me. You know, it's not that I'm making it up. It has happened you know, the last night the night before the closing. Eight o'clock in the morning was the closing nine o'clock. 10 o'clock. 12 o'clock in the night biodegradation SSH is not gonna give me the money. My six months worth of hard income boom disappeared in one second and on top of it. I ended up losing money. I mean, not that I did not lose money. The guy was good enough. He returned us them in our hard money, whatever. The point is, the sneaky people in the world to protect yourself. There is something called writing writing a contract beforehand. Yes. That's super important. Yes, this you know, just be careful because it's a lot of lot of money. You're not talking about 2030 $50,000 here. You're talking about millions and millions of dollars. I mean, I'm talking about the deals that I deal in. And you know, your multi million dollar deal you need $6 million from somebody here closing tomorrow morning directly to the escrow agent and you chose not to do that. Boom, you're done.

Mike Cavaggioni:

Yep. Now you don't have the money to put down. And that's it, the deal is going away. Alright, one more question for you. And this is, you know, Prashant, with all of your experience, you know, are there any last tips or tricks that you would recommend for someone who is just getting ready to get started, maybe as a limited partner into their first syndication

Prashant Kumar:

Well, learn to walk before you start running? I mean, you said, right, start investing as a limited partner with somebody. And if you really want to become a general partner, start helping somebody out maybe for free, show them that you are serious, and maybe get into them with, with their deal with your efforts, rather than going yourself out and trying to do $10 million dollar deal by your, by yourself on day one. So the best thing to learn, in my mind is to by helping others, you know, and in return, you know, it's just to keep strata equity, you know, you end up getting it back somehow. That's how I learned I got involved with the group. I said, Listen, guys, I'm gonna work for you for free. I don't care. And I mean, I hadn't could network also, I said, I'll bring the money to the table. I'll help you guys. I'll do this with everything you name it. Want me to click coverings clean your floors in the office? I'll do that. I would love a story short, I ended up becoming the partner in the deal with them. Right,

Mike Cavaggioni:

Right on. Yes. I mean, like, like you said, like that sweat equity, it does pay back and even if it's just

Prashant Kumar:

100% 100% no doubt about that in my mind. what you learn in the experience that you get from helping those GPS out, you know that that that in itself is going to pay you back in the future because that experience will make you more money in the future than not doing anything

Mike Cavaggioni:

So hey, Prashant, like this, this has been super awesome. I want to make sure that if anybody wants to be able to get in touch with you that they can we kind of talked about a little bit earlier, but if you could share, do you have a website, social media, email address, anything you want to share with the listeners?

Prashant Kumar:

Yeah, my email address is [email protected] Our website is myrealtygains.com. And I'm on social media, with myrealtygains Facebook, LinkedIn. My phone number is 631-428-6479 the many many ways you know and subscribe to the newsletter, I have a seven day email course a free email course I have a passionate passive investors club. Just join that just for the heck you know, to learn what's going on. I post blogs on my websites all the time. In the newsletter learn it connected me call me Yeah, the 100 ways nowadays to connect with me right? with everybody and anybody for that matter.

Mike Cavaggioni:

Yep, absolutely. Alright, so there you have it, folks. There's there's all the ways you can get in touch with him. I'll make sure the links in the email address and everything are in the show notes. So in case you didn't have a chance to write that down, you can just go copy and paste it and go check out what Prashants doing. Hey, again, Prashant super humbled that you took some time to chat with me today. I really appreciate it. Thank you so much.

Prashant Kumar:

Mike, thank you so much for having me. I'm so honored.

Average Joe Finances:

Thanks for listening to the Average Joe Finances podcast. Your source for beating debt, saving money and investing. Learn more at Average Joe finances.com. The Average Joe Finances podcast is for informational and entertainment purposes only. Do not use this for any real estate or investment making decision.