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What’s up, everyone? Today, we’re hearing some key points from Lincoln Archibald’s podcast interview with Neal Bawa and his data-driven real estate fund!
Neal Bawa is the founder and CEO of Grocapitus Investments, a fast-growing Multifamily Real Estate company that acquires, manages, and develops various products in MF.
Here are the interview highlights…
Data Scientist to Real Estate Expert
Lincoln: Let’s hear a little bit about you, Neal!
Neal: I am a computer science graduate and became a data scientist. I also ran a technology company and had a terrific exit. Then, I got into real estate, basically just for tax savings. This led me to start Grocapitus, in which we now have over 1K investors and $3M! Not surprisingly, most of them are geeks like me! Our analytics team ranks over 300 cities a year in the category of real estate profits, and about 20K people use that information to help them invest.
Lincoln: How long have you been doing this?
Neal: I started investing in real estate independently in 2003, and it wasn’t until 2014 when I took investor money for the first time.
Metro-Hopping
Lincoln: It sounds like you have a very systematic approach to investing, I’d love to hear more about that.
Neal: The first thing you should know about us is that we are closely tied with data and analytics. Most people say that because they perform proper due diligence and underwriting, and that’s great! But we’re different. We change metros every year. Most will pick a city and stick with it because they are comfortable there. You can’t say you are data-driven if you stay in one market. Every market goes through individual cycles; there is no all-encompassing real estate cycle.
Our goal is to take over 300 cities in the US, rank them, and be very transparent about which metros are going down and which ones are going up. For example, Nashville is currently hot, so many investors are there. However, according to our data analysis, Nashville has peaked. Chattanooga, the fourth-largest city in Tennesse, seems to be on the rise, which is why we are currently investing there rather than the more popular Nashville. However, it is much harder to convince investors to allocate their money there, but we are even more convinced by data that the market is warming up there.
The best part is that we don’t keep these insights private, we publish them for free on Udemy.com!
Superior CRM
Lincoln: Do you take the same data approach for your LP communication?
Neal: It’s good to be good at something, but it’s even better if you’re able to transmit that to your investors.
I decided to start a team out in the Philippines whose sole purpose is to transmit information to our investors. The company there is a separate entity and operates independent of me; they have a director, recruiter, and about 18 employees. I believe this team of reporters is superior to any other website or system that other fund managers have. These meticulous, frequent reports make the investor friendlier and feel more in the loop.
Our average check size is $140K, and it takes us roughly 9 months in our database to convert someone into an investor.
Conclusion
That’s all we’re covering today, but go to Spotify or Apple to finish the “Funds that Won” podcast if you’re interested in learning more about Neal’s operations and his data-driven real estate fund!
If you want help starting your own real estate fund or need help with the technical stuff, visit Fund Launch! Or, if you want to see read more blogs like this, visit the homepage!
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DISCLAIMER: This content is for educational and informational purposes only. It is not to be taken as tax, financial, or legal advice. You should always consult a legal professional before taking action. Furthermore, this is not a recommendation to buy or sell any security. The content is solely just the opinion of the authors.
