EP221: The Investor Mindset That Turns Difficult Deals Into Big Wins - Doron Levi

Speaker A: Are you like most sales and other professionals who want to grow their wealth faster than what they are currently doing through their company 401k? Even with that company, match the stock market or just plain saving money? Would you sleep better at night if you had the financial freedom to be job optional in just three to five years through investing in real assets? Maybe you don't want to stop working, but wouldn't it be cool if you could retire a decade earlier than most and do the traveling you and your family have planned for years while you're still young and can enjoy it? Let's face it, most busy professionals don't have the time or desire to take on more work outside of their W2 to grow their wealth. On the Wealth Flow. Each week we share the stories, the investments, and take a deep dive into the various asset classes that can deliver that accelerated growth to your portfolio passively. That's right, no extra work for you. Instead we'll put your money to work, learn what the 95% aren't talking about, and join the top 5% of earners today on the Wealth Flow.

Speaker B: All right, welcome to the Wealth Flow. My guest today is Doran Levi. He is a real estate investor, he's a developer, he's an operator who has built, acquired and improved over $100 million in real estate across multifamily commercial, hospitality, luxury residential and ground up development projects. He specializes in creative deal structuring, value add, acquisitions, risk, uh, management and scaling real estate businesses through disciplined execution. Today is he, he is actively partners, uh, he actively partners uh, with real real estate investors on multifamily and development opportunities across the U.S. doran, welcome to the Wealth Flow.

Speaker C: Thank you for having me. Great to be here. Yeah.

Speaker B: Looking forward to our conversation today. Um, I always do like to start though with your background, like to give it, get an idea as to what you did before, kind of where you grew up and what eventually led you to this world of real estate investing.

Speaker C: Ah, wow. A lot unpacked with one question. I, I grew up, I actually I grew up in Israel. I wasn't uh, I wasn't born here. I migrated here about uh, 27 years ago by myself. Ah, no real uh, you know, friends or family and kind of try to do anything under the sun just to kind of pay rent right for the first five years. And then I really quick understood that I can pretty much make good money on my own. I started just opening service companies. You know, I started one, I scaled it, it was kind of okay. Um, and then I had a Bad partnership. I'm like, I can do better by myself. And I just started for probably about 12 years just building service, uh, companies taking the lessons from the last ones I had and implementing them and uh, selling for a higher price. And um, then I pretty much figured I had enough. Uh, I lost my dad. Kind of was a mind shift for me about how I view myself as a parent and how I want my life to look like. And I went into real estate. So that's kind of my background.

Speaker B: Okay, interesting. So you kind of started with service businesses, uh, bought and sold a couple of those, or started and sold a couple of those and then, uh, decided that you wanted to spend more time as a parent and maybe not just have work, uh, be kind of the only thing. And that's what led you to real

Speaker C: estate in a, in a way. You know, uh, my dad was a, was a big, uh, career guy. He, he. He was very, uh, good at what he did. He, he read, wrote and uh, and spoke seven languages. He was a very, very, uh, smart guy. And uh, and he, he was very accomplished guy. The, the only problem is it was never around, right? So very quickly I found myself being him. And I said, you know what? Uh, back then I had two kids. Now I have three. I'm like, I want to do, uh, I want to, I want to be better than that, you know, so I'm like, you know, real estate kind of sounds like the venue, um, for that in, in a way where, you know, you could, you can, you can be more present. And so I just, I took all the knowledge I had from business, right. And I just implemented it in real estate, which I think gave me a bit of an edge. And I'm sure we're going to get into it a little bit later. Um, so, so, yeah,

Speaker B: no, that's great. And so when you took a leap into, to real estate, what type of real estate did you, you know what, what type of real estate did you first get into?

Speaker C: Ground up multifamily development.

Speaker B: Oh, wow. Okay. Ground up multifamily is what you stepped into first. That's super, uh, unique compared to most guests.

Speaker C: Yeah, I mean, I never did this fix and flip in my life before. Um, I just, I went to the deep end of things. You know, I, In a, In a, I don't want to say a weird way, but in a way I just approached it as a business. You know, I didn't approach it as real estate because if you think about it, all businesses pretty much have the same pillars, right? They have the financials. You gotta know your numbers, your sales and marketing, your operations. Um, same pillars. So I just. When I did my first real estate project, I just looked at it as, you know, as a business with the same pillars. Right. You gotta get the right people, which is your hr. You gotta know your budget, you gotta know your numbers, your financials. You gotta know sales and marketing. After you build the thing, you gotta know how you market it, how you basically, you know, move it. And um, that's kind of how I started. I, I didn't. It's crazy, you know, you. I didn't know two by four from a hole in the wall. I'll be honest with you.

Speaker B: Yeah, okay. That's crazy. That is crazy for sure.

Speaker C: Here it is.

Speaker B: So tell me a little bit about that first project. Then, um, what, where, where was this? And in what type of a multi family? How many units? Um, you know, kind of, uh, we can start with that and then I'd love to hear some of the lessons that you learned along the way as well.

Speaker C: Oh my God. So, so many lessons, right? Um, I got, I got about a half a block of warehouse. It was an industrial building. And I had this vision that I can knock it down and I can subdivide it and build an apartment complex on it. And uh, the way I did it is I said, okay, how much capital do I have? And. Because, you know, who in his right mind would give someone inexperience the construction loan, right? I mean, think about it for a minute. Like, I wasn't really bankable. So I was fortunate enough to have a good amount of capital from the last company that I sold that I could have, you know, kind of used my own capital. And uh, that, that's what I did. You know, I bought the thing, cash, it was about, uh, $780,000. And what I did, I completely knocked it out. It cost me close to 200 grand to take it down. I, uh, subdivided it, I entitled it, uh, another couple, couple of, um, of hundreds of thousands of dollars. And then when I subdivided it, I basically sold half of it. Okay, what the whole thing cost me because now I'm tied now it's fully entitled, it's worth much more. Right? Like I got, uh, building permits, MEPs, everything on it. And so I brought all my, all my capital back home. And then I, I basically used it at a very high ltv, ah, for a construction loan to kind of mitigate my risk with a lender due to my inexperience, which, you know, I had a really good track record of someone that executed on, on businesses. So I wasn't a complete clean slate, but no real estate experience. And then I just built, um, a 25 unit apartment, um, building on my half. So, uh, that was, that was my first project. The bank gave me 18 hour, 18 months to complete. I got it completed in 12 months. They gave me, um, I think it was back then six or eight months to stabilize, to stabilize it in four. And um, and I, and I just refi, you know, through a permanent loan.

Speaker B: Nice. Very cool. And, and where was this geographically where?

Speaker C: Philadelphia.

Speaker B: Where'd you do this? Philadelphia. Okay, nice. All right, well that's a heck of a, heck of a run there. And then, uh, and you did a lot in there. I mean, it wasn't just a ground up, uh, development. I mean, you hear you took a piece of land that started out as being industrial, you subdivided it. You had the ability to actually, after entitlements, get, you know, your, your initial money back, uh, out of it and then financed the rest and then went permanent on it. Do you still have that asset? Is that one that you've sold since I built it?

Speaker C: So I built it for about 3.4 million.

Speaker B: Okay.

Speaker C: And uh, now it's worth about seven, four.

Speaker B: Nice. Very cool. And so from that, what, what? Tell uh, me a little bit more about, you know, what, what you've done since then. So that one you did, and then uh, obviously it was successful. What, uh, what have you done since.

Speaker C: So, so, um, have you ever seen the Sopranos?

Speaker B: Yeah.

Speaker C: So. Because I just want to be clear, I don't know that from firsthand experience, but apparently the, the, the, the Italian mafia, they, uh, they use a monkey to basically take the rap for people and sit in jail. I'm doing something with this. Just bear with me. Okay?

Speaker B: Okay. Yeah, yeah.

Speaker C: So I got, I got it. And so my next one was getting a monkey to buy off the half that I sold. Initially that I just seen that it was not being developed like a year and a half later because I'm like, I can concentrate my resources, right? Like my property management, my contractors, all my people. Like, I got an asset right here, right? So it just made perfect sense for me to buy it. I saw that he didn't do nothing with it, but I knew that if I'm going to come to him, because obviously I know how much I sold it to him for, then it's going to be a tough negotiation. So I got a monkey and I basically, which was a friend of mine, I told him hey, just pretend like you want to. You want to buy it off of him without him knowing I'm involved. And, um, I kind of negotiated through the monkey and, uh, you know, and I got. I got it for almost what I. What I paid for it. Just like, shy, then. Shy under, um, 90 grand. Um, because he was just stuck with it. Like, he didn't know what he's doing. He. He was like a. Like a big tile, uh, guy. He was importing tile. He wasn't a real estate guy. So, you know, he got investors money from overseas, and he was like, he was basically, you know, frozen out of fear that he didn't really know what he's doing, and he's over his head. So I was able to identify the pain, um, which I'm kind of giving you a hint for a good question to follow just as means to try to drive value to your listeners. Wherever there's pain, you can get creative much better. So I always look for the pain. Like, what is. Why, why, why in a year and a half, you didn't do nothing with it, Right? So. So that was his pain. That was his pain. But he had an ego thing. Like, he can. He can come to these investors to say, I'm just giving you your money back. Because he also promised them like, pref. You know, so I got it. I got to give him enough to kind of get him out without taking a hit. So that's what I did. So I bought that and I. And I built another, um, smaller complex because, um, I was trying to bypass just some stormwater management because it was. It was on one big, big lot. Um, so I built a 17 unit, but luxury homes, like, not homes, luxury, luxury apartments. It's like a resort feeling, which, you know, I was just challenging myself. I love to challenge myself with that specific build and, and I did well with it. Uh, I still have it to this day. I try to hold everything I build. So that was my second one. Um, I mean, how. How more you want me to go? Like, do you want me to tell you? Just tell me. I don't. I don't want to keep going.

Speaker B: Yeah, yeah, absolutely. No, no, no, for sure. I. I just. I'd love to hear how it progressed. I mean, it sounds like, uh, that was logical to, ah. While. While it was unique to go back to somebody you've already sold the property to was still, you know, like you said, it was kind of a logical next step, uh, since you already had, you know, an existing 25 unit apartment. Uh, uh, that was right There you had your resources there for the managing that apartment. Um, but, um. Yeah, what, what else, uh, what else did you buy next or develop next?

Speaker C: Yeah, so, uh, the next one was actually, um, right after. Well, it kind of started before COVID hit in 2019. Was it 2019 or 2021? No, I think it was.

Speaker B: Covid was like right around 2020. Um, it was about. Yeah, like March 2020. Something. Yep, exactly.

Speaker C: Okay, got it. So, so, um, you know, we, it. There was a, there was a, A, a industrial looking like it was a senior assistant living looking like later on at it, they kind of got wiped out by Covid. You know, half of the population there. Um, you know, half of the seniors didn't, didn't kind of survive Covid, and the other half got pulled out by their families not wanting to end up like the first half. Um, and, um, it looked like, like a good play for multifamily. And, uh, we gave an offer, actually was, was rejected. It went under contract with someone else. But the broker liked us so much because we were like really kind and professional and you know, hey, good luck with it if it doesn't work out. Just we're here, we're interested. Just let us know. Sure enough, like a day later, a day after he fell, like literally a day after he fell, they're calling us and um, got in under contract. It was an historical building.

Speaker B: Okay.

Speaker C: And, uh, I don't know what you know about, you know, renovations and things like that, but historical building, it's like the black belt of renovations. Like, it's, it's very, you know what I mean? It's very, uh, challenging, for sure. Challenging is a good word. Yes. I'll take it. So, you know, I got all the, all the, all the zoning and permits, all the things. And uh, you know, we, we had it already approved for 41 units. And um, a year into the construction acquisition was 3 million and um, construction loan was 4 million because we were basically converting the senior assistant living into an apartment. So you're talking about beds with oxygen, you're talking about, um, handicapped bars and ADAs everywhere. It was a heavy lift. It wasn't just. So, um, about a year into it, we saw that Airbnb got prohibited in Philadelphia. I don't know if you remember. Um, it kind of followed the trend all over the country between. It started. It started actually in, uh, it started in San Francisco, New York, and they cut off Airbnb and just scratching my head thinking where all the short term people are going to go, right? Like this is going to be a void in the market. Um, you know, without going over anyone's head. Development 101 is basically listening to the market. I always preach to people, it's never what you want. It's what the market needs. You can have an amazing idea, but if the market doesn't need it, it's not going to absorb it, it's going to fail. You can build something amazing, but if the market doesn't need it, and it doesn't need it. So the market had a big void and I'm like, we can just fill that void, uh, with short term. So we, um, found a loophole to get, you know, in the zoning to, to get basically license to. To have a hotel and uh, pulled another $4 million construction loan for now 8. Uh, so we're about 11, a little, a little over 11 million in it. And uh, three, three years later we, we got done that project and uh, completed it, ah, to get appraised for almost 30, uh, million now. So.

Speaker B: Oh, wow.

Speaker C: That was, uh, that was that project and um, great, great success with it. You know, we, it was uh, featured in a New York Time magazine as a must see. Two, uh, restaurants got really, um, nationwide, uh, recognition. One was in the magazine Aspire magazine, one of the best restaurants, ah, in the country in 2024. And, and then the other one got number one in Philadelphia in 2025. And just a lot of recognition. The synergy was obvious. Get a good restaurants going on so you can get the food traffic into the hotel to get exposure to the actual hotel. So we were kind of heavy on the restaurant end of it, which is m. Also a business. Right. Um, and it worked very well. And uh, we got development, best development of 24 by the business Journal, ah, for that project. And um, not too, too long ago we got a Michelin key for this establishment. So a Michelin key is not like a Michelin star that you think like a restaurant has. A Michelin key is for the actual establishment. So did, uh, very well with it. And um, it was a big project. I mean, took us about three years to complete.

Speaker B: Yeah, sounds like a big project. Wealth Flow. Audience Pardon me for a quick interruption to today's show, but I have some exciting news that I want to be sure that all of our listeners are aware of. We just launched three totally unique to the market, funds that are at the cutting edge of technology and AI. We have combined my 25 years of real estate experience and my recent work as VP of uh, development for a tech company to Bring three awesome investment options to our audience. For full details, go to our website@bobo capital ventures.com. again, that is B O B O capital ventures.com. all right, back to the show. Did you still have, um, so initially you were doing this, you were doing a conversion to multifamily. Do you still. Was there still some multi, uh, some, some rental, uh, property that was not, you know, short term, it wasn't hotel.

Speaker A: Ah.

Speaker B: Or did you end up pivoting and then converting the whole thing to hotel?

Speaker C: The whole thing.

Speaker B: Okay. Okay. And yeah. And it seems like what. When you originally were thinking you were going to redo it to hotel, were they going to be like one one bedroom type units or were you joining some of the rooms together? Because it seems like senior L most likely was set up as single individual, you know, bedroom areas. But m. But maybe not.

Speaker C: Yeah, you, you're, you're right. So, uh, it's a very unique boutique hotel in the sense that every room is different. There's no single room that is identical. And so the two main components were the commercial areas. Like, think about it, it was over 15,000 square feet just of commercial areas between the cafeteria, bingo room, a library, you know, just a lot of places where they played like, bingo, um, that needed to be converted. And again, it was all about the synergy between the rooms and the commercial area. So we kind of had a concept of getting kitchenettes, uh, inside because we already had the plumbing. So every room has its own, like, kitchenette, which, you know, we custom made to sizes. Um, I developed a lot of good relationships overseas.

Speaker A: Ah.

Speaker C: Because I import a lot of stuff. I import stuff from Turkey, from Italy, from Greece. Um, I used to work heavily with China where they fabricated for me everything for specs. Now I don't work with China as much, but I do work, uh, a lot with Turkey. Uh, Indonesia. We fabricated all the furniture to the hotel in Indonesia. I can't even tell you the markup in this country for furniture is insane. Okay. Um, and, and that project really pouring all my relationships. Um, we flew a pool in from London just to give you an understanding of how much crazy did, like, we went there. And so the concept was to make something extremely unique. The area is, is a, is a very unique area where it's like cultural mecca for restaurants and like, and like nightlife. So you had to have the good location, obviously, in order for this to succeed. Because I'm not going to stand here and, you know, and take credit for, um, the success without mentioning the fact that if we Wouldn't be in as good a location. I'm not sure, you know, I would have gambled so heavily with, you know.

Speaker B: Yeah.

Speaker C: The play. Right. So the location was, was good. Again, listen to the market. Right. Like, so, so that helped. Um, so. So, yeah, I mean, we were able to explore a lot of loopholes between tax incentives. Like, I got probably close, close to a little under $2 million in tax credits.

Speaker B: Nice.

Speaker C: Just because it's being historical. Right. So being a developer really helped. Cause. Cause we know a lot of loopholes. Liquor license. Right. It's a few hundreds of thousands of dollars. We were able to find a loophole. We got it for free just by adding one more room.

Speaker B: Okay.

Speaker C: Isn't that something?

Speaker B: Yeah, that is. What was the catch there? Why would it. Why, why by adding one more room did it make a difference?

Speaker C: Cause they, they had, they had to divvy up to amount of rooms. I don't, I don't exactly remember. You are talking over four years ago, but it was a nuance between the zoning attorney and someone in the city where they identified it is like, uh, I don't want, I don't want to just say, but. But we got it for free. Yeah. I mean, you are talking over four years. But so, so, yeah, so that's pretty much it. I mean, it's doing well. It's doing. It's, it's, it's, it's growing, uh, every single year between, between revenue. Um, we're still learning it. I'm not going to stand here and tell you it's perfect because, you know, I don't have a background in restaurants or in, in, you know, hospitality. So I'm learning it. Uh, but, you know, we went through some turbulence and we're. Our ADR, which is the average daily rate, went from 250 to 350 to now 450. And over the weekend, we are even getting $800. Ah. You know, a night. So we're getting up there. And um. And you know, we're doing a lot of venues like weddings and things like that. So that also helps. So you kind of. You kind of do a trial and error and implement and, you know, correct your course. Kind of like when I sold companies, I took all the lessons and I moved them on to the next one. To the next one. So again, it means to drive value to your audience. If you ask me, my number one take from that project is to learn how to pivot. You have to pivot. You have to always pivot and pivot. That's the number one trait I think a good entrepreneur needs. I see a lot of people, they fail because they get stuck in their head and they freeze. Huh. You gotta keep pivoting, you know.

Speaker B: Yeah, yeah. Makes a lot of sense. And you certainly. That's a great example of definitely doing that. So, I mean, that's several really, really crazy projects, uh, but very, uh, impressive. Um, and I'd never heard of a Michelin Key, but, uh, that's really neat that, uh, uh, that you were able to achieve that. And, and. And also just have, you know, having the restaurants in there that are successful, huge, uh, driver for the hotel. What. What, uh, what other projects did you. Did you do, uh, and take on after that?

Speaker C: Well, I was kind of. I want to say I was kind of, you know, not fed up, but. But I kind of like, I wanted to rest from projects after this one, you know?

Speaker B: Okay. Okay.

Speaker C: But it's not the truth because now I'm building a small luxury neighborhood now, so I didn't learn my lesson, but for a little bit, I just was focusing on acquisition. But after this neighborhood, I'm really like, I want. I want to rest. I just want to focus on acquiring. Like, I'm acquiring multifamily value.

Speaker B: Ah.

Speaker C: ADD is really my niche. It's been my niche. I love it. Um, just, uh, just buying multifamily and doing value ads. Like, one week, I just got, um, not too long ago, I closed on it. Like, maybe not even two weeks ago. Two, uh, hundred thirty units, uh, value add was mismanaged. Picked, uh, it up for 8 million. And performa within 5 years is gonna be 16 million. So those are the things that, like, you know, for me, it just makes perfect sense. Like, I know the construction end. I know the zoning. Like, I know I know everything inside out. Like, for me, where I'm at, it's kind of stupid not to utilize all my gears, you know, it's like, you know, you have a Ferrari and you're keeping it stuck in second gear. Like, I know a lot. I need to put it in good use, uh, for sure. So that's where I'm focusing now, really, on multifamily. Um, um, value adds. Hospitality is extremely demanding. And, um, let me tell you something about restaurants, man. If you hate someone, wish for them to have a restaurant. How's that? Yeah, straight up. I mean, I'm just being honest with you. Yeah, it's a lot.

Speaker B: So. So do you guys own the restaurant as well? And, uh. Okay. Wow. Okay.

Speaker C: Yeah. We don't listen. We own It. We operate.

Speaker B: Wow.

Speaker C: One restaurant alone has 47 employees.

Speaker B: Wow. It's a heavy lift, for sure. Yeah.

Speaker C: Yeah. So. So, yeah.

Speaker B: And so how did you. How did you. Tell me a little bit about that? Because that's. That's also unusual. Right? Uh, what kind of food is it and how did. How'd you go about with the concept of that particular restaurant? And, um, you know, what, uh, do you have. I assume you have a team with. That helps you out with this. But tell m. Me a little bit about. Know how. How you came about, you know, with these restaurants and. And put them into action. Because, yeah, if you look, restaurants is, uh, one of those businesses that, you know, even if even a good restaurant that, you know, appears to be a. A place that you'd want to go to again, sometimes you'll go back and then they're challenged and you know something, you know, maybe there's inconsistency, and then all of a sudden the doors are closed. You know, it's like. It's a hard business. I mean, it is a tough business to be in, for sure.

Speaker C: Yeah, it's. It's. It's very tough. And that's why I said what I said. And at the end of the day, you know, I think that learning how to do things you need to do and do them right is only half for the part of. The part of what people think they might need, because the other half is what not to do. You know, what not to do is just as important. So in the beginning, we had, um, you know, it's a management company. We actually went through a couple, and, um, we went through two, but the second one actually was bought by. By a different company. So we actually went through three. So we really learned how much you can screw things up by doing things wrong. And those are big companies that have, like. Like Sheratons and Hilton, like Hiltones, like, they're. But hospitality is very tough, but it's also very rewarding, you know, in a sense that if you screw up, people, like, it takes. It's very, very hard to build. It's very easy to ruin. Right. Like you destroyed in a minute.

Speaker B: Yeah.

Speaker C: But it's very hard to build, like, loyalty and things like that, for sure. Um, but restaurant is really, really tough. You know, labor is hard to find. You know, I mean, I don't know how old you are. I'm 47. And when I was 15 and 16 and 18 and 20, I did anything under the sun just to make a buck. Like, I busted tables. I worked 14, 15 hours a day. Um, and nowadays people don't want to work, right? I don't know if it's the Instagram with all the Lambos. Like, I don't know what, what's. I don't know. They think they can make easy money, but it's also very hard to find labor, you know, for sure, for that industry. And it's not just for me. It's like everyone in town is having the same problem, you know. So we learned a lot, a lot on how to do things, but also what not to do. Like overstaffing, for example. We learned, um, we learned from the other, from the other management companies what really matters. Like they were looking at matrixes that were like important on paper, but in reality didn't really drive the important things like the customer loyalty. Like we have people flying in from Germany to our hotel to be in our hotel and they can go stay in New York and anywhere they want, right?

Speaker B: Uh-huh.

Speaker C: Like the little things, the little nuances. But at the end of the day, you know, you really have to understand that it's, it's, it's a full fledged business. It's not real estate. Hotel is not real estate. Hotel is a full fledged business. Having restaurants or not. And if I ever get another hotel, I'm not going to get a restaurant with it. Um, if I'm going to have any kind of food and beverage, I'm just going to like rent it and not even deal with it. Like just give me a rent check or some sort of, you know, of a, of a spread with, you know, your revenue maybe, um, but, but not, not anymore to manage it. But it's something that I, I, you know, we had to do and we had to learn and not likely that I'm gonna do it again. They like restaurants, you know, I'm being honest.

Speaker B: No, yeah. Uh, it's a good, great lesson though, for sure. And I love that you're now looking at kind of existing assets and, and, and coming in and saying what can I still, you know, I still have the skills of doing, being able to do ground up development. That's still something that I, you know, know how to do, uh, and uh, have the team to be able to execute on. But now you're taking some existing stuff that's a little bit lighter of a lift. Uh, but you can reposition those and, and, and uh, you know, gain a ton of value. Uh, like you mentioned, I mean you're going from potentially, uh, buying in at 8 million and, and uh, you know, uh, working through the performance. So you can get it up to the 16 million?

Speaker C: Yeah. So that one specifically. Have you ever heard of American, um, Heritage Bank?

Speaker B: I have not.

Speaker C: What part of the country you're from, Keith?

Speaker B: I'm in, uh, San Antonio, Texas.

Speaker C: Gotcha. Okay, so it's a, it's like a federal credit union, basically. American Heritage. Okay. Uh, the reason, the reason I'm, I'm bringing this up is because they're very big. So the founders of American Heritage gave this property to their son. He's about 60. Just to give you perspective, right. He had 22 different properties. This was the smallest one. He had 230, um, units out of in his portfolio. This is the smallest one that he got. Um, and he just didn't know what he's doing. Right. Like, he, he just. I don't know if you heard the expression banks are not in business to own real estate. Right. They're only lender on it. So they're very good at lending. Like risk mitigation is probably the best thing they do, but they don't know nothing about how to manage real estate or nothing like that. And he was just driving it to the ground like a multifamily, you know, with, with over 70, 70% expenses. Right?

Speaker B: Yeah. Yeah.

Speaker C: Um, he actually said no to an $8 million cash offer.

Speaker B: Wow.

Speaker C: Yes. So the way I, the way I lured it, man, is, you know what, how about you'll be the bank and I'll pay you interest. So instead of just taking the $8 million cash subject, you know, getting yourself subject to capital gains, how much you're actually going to keep out of that? Yeah, let's, let's, let's do a seller finance. And let me, let me, let m. Uh, let me have you as my bank. You hold a note, you're securing your, you know, your, um, money, um, through the deed and um, I'll just pay your interest. And he, he was like, he was like the, the, the emoji with the two hearts in his eyes. When I told him that. Yeah, I, I'm telling you, he was like, oh, well, tell me more. You know, so, so, dude, I ended up doing a five year. Well, it was, it was a three year balloon with an option to extend for two years. Year one, 4.5% interest.

Speaker B: Wow.

Speaker C: Exactly. Year two, 5% and year three, 6%.

Speaker B: Nice.

Speaker C: And then I also have an option to extend it by two more years. Year one and ah, 5%. No points, no fee. Year two, 6%. So I have a blend interest rate of about 5% 5 years.

Speaker B: Yeah.

Speaker C: Is that good?

Speaker B: Oh, fantastic. Yeah, yeah.

Speaker C: Oh yeah. And there's no banks, right?

Speaker B: Yeah, yeah, exactly. No, that's perfect. And are those, are you paying principal, uh, and interest or they interest only or how did you say that?

Speaker C: Both principal and interest.

Speaker B: Okay, okay. Just curious, just curious.

Speaker C: And either way, amortization.

Speaker B: 35 year old.

Speaker C: Yes, sir.

Speaker B: Oh, there you go. That's the beauty of, uh, seller finance, right? You can kind of make up whatever terms you want and. Ah, yeah, that's, that's awesome. That's awesome to hear for sure. And, and, and great point too. You know, here as somebody has an opportunity to take $8 million, an offer for $8 million cash, but you know, by the time you're done paying capital gains on that, um, you're going to take a hit, you know. And so this gives him an ability to, I'm sure he didn't need the money. Uh, and this probably puts him in a position where, you know, now he's receiving that cash flow coming in and really, you know, only paying off some of the principles. So.

Speaker C: Right. So again, understand the pain because rich people have a different problem. They have too much money and they pay too much taxes. The guy literally jumped on his jet, came with his wife to eyeball me when we did the due diligence and shake my hand and he went back on his plane and flew back home. Like the guy was born into a jet like from his dad. That's just, it's, it's a, it's, it's, it's a lot of money, put it that way. Right. So.

Speaker B: Yep.

Speaker C: So, uh, uh, what, what is one of the biggest problems that rich people have? Taxes for sure.

Speaker B: Yeah.

Speaker C: Taxes. Right, yeah.

Speaker B: Ah.

Speaker C: So I basically helped him. And um, at the end of the day, he was in pain because he was running it to the ground. He had over 70% of expenses on that multifamily. 70%, I think, 73%. So I come in with my team, right. And we installed the right systems in place, we put the right, uh, procedures in place and, and we just start biting into the, to the expenses. And by year three, we're, we're close to 50%. So then you increase, you're increasing your NOI, right?

Speaker B: For sure.

Speaker C: And when you're increasing your noi and a little bit in, in the rent, but it's not, it's not a rent lift. Like I'm not going to stand here and tell you that the rents are significantly under market value because they're not. Yes, they're A little bit, you know, because it's, it's, it's, it's a workforce, you know, a little bit. But, um, the bulk of the value add is not even through construction. The guy dumped $3 million to renovate the place. $3 million. Every window on this 230 units was changed. Over 70% of the units are almost brand new.

Speaker B: Yeah.

Speaker C: Not renovated, brand new. Like new kitchens, new countertops, like, new. So it's not like even that. It's not like the, the value add is a heavy lift as far as, like construction. Right. So what is it like under 40,000 a door, where the market sells for about 80,000 a door? Because you make the money when you buy, you know, Keith, that's when you make the money.

Speaker B: Right, right.

Speaker C: You buy.

Speaker B: Right? No, it sounds like you did. You bought. You bought darn right there. And uh, you know, and, and at the end of the day, it doesn't. Whether you're increasing rents or you're decreasing, um, you know, the expenses, at the end of the day, you're increasing the noi. So you're, you're increasing the value of the property by doing so. Um, and so, you know, there's more than one way to do it. And uh, you know, usually it's a combination of both, but, uh, when you see somebody that's got 70% expense ratio, that's, that's high. And so, you know, there's ways to be able to look at that and say, where, where is this bleeding out and where, where can I help out here? And, uh, and get it, you know, more in line with what, uh, what it should be. So.

Speaker C: Yeah, yeah, so, so it's that. And then you, you, you were able to, to obtain a relatively cheap debt to, you know, to even help you more with your numbers. Right. Um, so yeah, it was, it's, it's a good deal. So you asked me what am I up to now? That, that, that, that is it like multifamily with the more doors, the better, you know, because if you do a red lift on even $50 over a few hundred doors, then it's significant money, you know.

Speaker B: Right.

Speaker C: Um, and, and just do the value add. That's really where, where my head is. And that's what I'm looking to do more of and expand on and even through creative. Because, um, you know, there's different. I, I have a really good friend that. He's a, he's a car. Used car sales guy. He's in his 70s for over. For probably close to 40 years. His name is Gary. And we, we stood in his, uh, dealership one day. You know the service lane where people just bring their cars to get service? And there's a glass, there's a window, glass window. We're standing inside and I'm not making this up, Keith. I can't even make this thing up, even if I think about it. A yellow Beetle with neon pink seats pulls to the service line. And I'm, um, looking at this and I'm like, is this, it looks like a cartoon, right? And I look at him, I go, Gary, who the hell's going to buy this thing? Right? Yeah, dude. He didn't even blink. He looks at me like dead in the eye and he goes like, there's an ass for every sit, my friend. There's an ass for every seat. Yeah. Why am I telling you this? Because there are people out there that have problems.

Speaker B: Uh-huh.

Speaker C: And they can't find someone to take those assets because they have problems. And that's where I fit in.

Speaker B: Yeah. Yeah.

Speaker C: You know, like most people, like, how are you gonna, how are you going to find a bank that's going to lend. You think about this for a second. On a multi family with 70% expenses.

Speaker B: Yeah. Very difficult. Yeah, uh, for sure.

Speaker C: Of course, of course. Right. So I just bring creative solutions to difficult problems and I make a win win for both the seller and myself. That's all.

Speaker B: Yeah, no, it, uh, sounds like you've done that all throughout, uh, your career. And has this all been in the Philadelphia area or where all are you looking and purchasing?

Speaker C: I buy nationwide, mainly red states. Um, I'm not trying to give myself a plug, but on my website there's a buy box that actually shows exactly on the map where I'm buying. Uh, so I try to stay focused in landlord friendly states.

Speaker B: Makes sense.

Speaker C: Allow, allow you to. Because, because I'm trying to hold them. I'm not trying to flip them, you know, so I'm in essence becoming their landlord. So I'm just focusing on, on those type of states, you know, Landlord friendly states.

Speaker B: Yeah. Yeah, for sure. Okay. Well, no, this has been, uh, this has been great. Um. What, what? So look, you've, you've done all kinds of things. Um, and you know, I think there's kind of an underlying theme that it's been good, uh, and that's really kind of solving people's problems, finding a problem and solving it. Um, but aside from that, if there was like maybe the top three things that you've learned from these various projects the various things that you've done. What, what would those be? What could you convey to the audience? Um, you know, you've got a ton of experience, so I'd love, love to hear what that is.

Speaker C: Oh, that's easy. I don't even need to think about it. First of all, uh, it's never about you. Yeah, nobody cares. Nobody cares like what you want. Nobody cares. It's not relevant. It's always about them. If you can stay focused on on them and actually understand what the issues. Because most people are too caught up on what they want. And if that fits their box, then you're going to get so, so much further than most people. And the second one is, you know, God gave us two ears and one mouth for a reason. Listen, um, keep your mouth shut and your ears open. If you're nice to people and you're kind to people, he would amaze you how much information they'll tell you. Yeah, listen, keep your mouth shut and your ears open and listen.

Speaker B: Yeah, makes sense.

Speaker C: That's the best advice I can give you listeners. Ah.

Speaker B: Uh, that's great. No, this has been good. Well, Doran, how can people find out more about you?

Speaker C: Um, well, follow what I'm up to on Instagram. My first name, Duron Levy, with an I. Uh, D O, R, O N. Um, Duron Levy, REI for real estate investment. And my handler. And, and I'm very responsive to my DMs. If they've got questions and they need advice, then I'm m always here to help.

Speaker B: Perfect. How about, um, I, I got two other questions for you that I ask every guest. One would just be any advice you'd give somebody who's maybe just starting out in their investment journey.

Speaker C: Um, you have to have some sort of risk tolerance to do real estate, but you got to pick the right one for you. Don't look at who's doing what to your right, to your left. Um, understand that people are different and you are just like other people. Very different than the other peoples you want to become. Uh, you know, in the Bible it says, know thyself, know yourself. Like it's okay to be risk averse. And you should. If not, just go have a W2. You have to come out of your shell. Because it's not just that dreams happen outside of your comfort zone, they also die in your comfort zone.

Speaker B: Yeah.

Speaker C: So you gotta be a little bit of risk diverse. And not everyone has to be an entrepreneur. Not everyone has to do this. If this is not good for you, don't force it, if you like to be comfortable, you know, then that's okay. But, but figure out who you are and understand who you need to be in order to do this. And if they're not the same, that's totally okay. But when you don't figure this out, there's a lot of pain involved.

Speaker B: Yeah, no, that's great advice. Love it. How about book, uh, recommendation doesn't have to be real estate related. Certainly can be just something you've read that's been impactful. Love it.

Speaker C: Um, eos? What the heck is eos? EOS is basically a way to help anyone in business, real estate or anything else scale. It's going to save everyone so much pain, especially the, you know, the entrepreneurs. Because, uh, entrepreneurs are visionaries and usually visionaries are not good with, you know, um, financials and paperworks and all the things that you, you know, you kind of hate, but you kind of have to have right skill. So EOS just really, really helps. It's, it's, it's kind of like a, it's a mind frame on, on how to. It's, it's, it's system for entrepreneurs to scale. It really makes a big difference.

Speaker B: Yeah, absolutely. No, this has been great. I appreciate you having, uh, taken the time to visit with us and being a guest on the Wealth Flow and I think we'll call it a show.

Speaker C: Yeah, man. Thank you for having me. I had fun. Hopefully, um, I helped some of your listeners, you know.

Speaker B: I'm sure you did. It was great, great advice. Appreciate it. All right, if you're still here, I assume that you found value in today's show and with the guests we interviewed. Please take a minute to subscribe and to review the show. It really helps. Also wanted to remind you to check out Bobo Capital Ventures to get the first look at our three new cutting edge first to the market investment opportunities. We have only about 15 spots for each fund for retail investors and we would love more than anything else to have our audience be part of, of that group of limited partner investors. Thanks for listening to the Wealth Flow and have a great day.

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