GI268: Passive Multifamily Fund Investing with Igor Shaltanov

GI268: Passive Multifamily Fund Investing with Igor Shaltanov

Igor Shaltanov is a former professional athlete who began investing in real estate in 2015 and founded Avista Fund in 2020. They focus on raising capital from local and international investors to invest in income-generating, value-add multifamily properties. They currently serve as a limited partner to 20 different real estate deals, 3,200+ multifamily units, with a total value of over $500MM.

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Transcript:

Charles:
Welcome to another episode of the Global Investors Podcast; I’m your host, Charles Carillo. Today, we have Igor Shaltanov. He is a former professional athlete who began investing in real estate in 2015 and founded Avista Fund in 2020. They focus on raising capital from local and international investors to invest in income-generating, value-add multifamily properties. They currently serve as a limited partner to 20 different real estate deals, 3,200+ multifamily units, with a total value of over $500MM. So thank you so much for coming on the show today, Igor.

Igor:
Oh, thank you Charles. Thank you for having me. It’s always a pleasure.

Charles:
So you have a very interesting story and I’d love to kind of break into see exactly your personal and professional background prior to getting the real estate bug about 10 years ago.

Igor:
Absolutely. So I should probably start with my pro career. So when I started to play water polo, it was actually water polo. Not a lot of people know that sport, and you know, they kind of describe it a lot of times as that soccer was on the water, something like that. So it’s is funny. And so the, the good thing about it being pro athlete, like you doing what you love, you playing game, right? So you do play game, but at the same time, right? So you get money. So, which is kind of a dream, right? You’re playing games and you get the money. So, and the other side of it, and I don’t know if it’s a good side or bedside, it’s kind of artificial world. That’s what I’m always saying to the people. So, because you don’t get to build the businesses, right?

Igor:
Interact with people drafting a lot of contracts through the, you know, through the year. So you kind of a little isolated. You do have a bubble up the league, right? Or whatever you plan, right? That the, let’s say it’s NBA for example, right? And it’s usually all things around you. It’s, it’s usually taken care of. All you need to do just perform at the highest level possible. And that’s exactly what I was doing, right? And then once I stopped, that was just the aha moment. It was like, oh my goodness, nobody needs like a 20 years of waterfall experience, right? Nobody’s gonna hire me for that. Right? Or, so your income stream is that like you really need to come up with something, right? Which is going to be supporting your lifestyle. So, and that was a very interesting story, challenging story as well. And I think I’m gonna stop here. So if you wanna,

Charles:
Yeah. So how did you get involved? I mean, how did you choose real estate as your investment vehicle once you transitioned out of your professional career?

Igor:
Think it’s a great question, Charles. There was I always telling the same story. So I was maybe about 14 or 15 years old. Imagine it’s a Russia, ’cause I was born in Russia. I moved in 2010 and it was one of my friends and we outside, right? And we just messing around as kids and he said, oh, you know what, I’m gonna go pick up money. I was like, what do you mean? So tell me more about that. So he said, oh, I’m gonna pick up money. So somebody lives in our place, in our apartment and I’m gonna pick up the money from them. I was like, what does that mean? So I was like, it’s, it’s like, tell me more. Like it’s, it’s what do you do with that? Like how, how do you do that? And it’s, it’s the first bug ever.

Igor:
I was not investor, but I learned so you can actually give a place to people and they can pay you rent. I didn’t know what it was called back then, so, but I, I got that first buck. I was like, oh my God, it’s possible. Right? So, and that was the first introduction. I would say to myself, I didn’t take any action. I was like 14 and then I played water polo and stuff. But then maybe in two thousands my mom saying, oh, you know, we got extra apartment and I don’t know what we’re gonna do with that. Maybe we’ll leave here and there. Maybe we’ll move different places. Like, you know what I heard, you can do this, right? You can rent it to the people and get an income. I didn’t know how to call it. I said, you can give it to people and they’re gonna be paying you to stay in this place.

Igor:
And again, I’m talking about 1995 when I first time heard it. There’s no YouTube channel, there’s no financial books, right? It, it’s like, it’s a tough, it’s you on your own. You need to learn that there’s no mortgages, there’s no leverages, there’s no bank account. Like it, it’s a tough, it’s a different time, right? So, and then my mom’s saying, okay, you know what, we got this place. I said, listen, let me do this ’cause I do have cash, right? I’m playing water polo, I receive money. So I said, I’m gonna remodel one place. ’cause We have two of them, one of them older, one of ’em brand new, but it’s not, you know, when you buy, there’s, there’s a lot of things when you buy, there’s no basic remodeling, right? And just the concrete walls just a simple concrete, right? What you need to do, you gotta put in the money there.

Igor:
So you gotta put the floors, you gotta put tile kitchen. And we’ve done it multiple times. I said, I’m gonna remodel that thing so you guys move to the new place ’cause you deserve to new place. It’s brand new, it’s just built right better neighborhood. And I’m gonna move the people into that old place. I’m gonna remodel that one as well. So basically it took me about six months to convince them. ’cause They get used to there where they leave, we don’t wanna move. We’ve got a beautiful park and all of that, blah blah, blah. Emotional attachment, right? But I said, listen, once you move out and we’re gonna put people in place, right? You’re going to be earning equivalent of your monthly salary. And that’s turned her mind. So I said, that’s gonna be equivalent of you working seven days, I mean, five days a week, right? For four weeks, a month you’re gonna be doing. And then that’s completely turn our brain, oh my goodness, really say yes, that’s possible. So, and because it’s not leveraged, that’s what’s exactly what happened. So it was two students, they moved in and this was my first ever time when I started to actually exchange the place. Too many.

Charles:
That’s quite the story. Yeah. It’s a it’s a very powerful business. I mean the recurring revenue part of it, I wouldn’t say it’s completely passive unless you’re a passive investor, but the recurring revenue of it makes it a very, very powerful wealth building asset class.

Igor:
Absolutely. Yeah. It’s a hundred percent. There’s no question about it.

Charles:
So Igor, your business model is unique compared to other investors we, we normally have in the show. Can you describe kind of your investment strategy criteria and kind of what Avista Fund does?

Igor:
Absolutely. the story is, so from multifamily, and I heard your story as well, it’s kind of similar, right? And I, I, I see it and I hear that all times and times again. So people start with single units, right? Because, and the probably narrative is, so we’ve been told we have a passive investing, right? Which is real estate. And when we’ve been told that we bought it, right, we got into that idea. So we bought it. And then on unit four, five, you really understand, so you bought another work, right? So yeah, I’ve got full-time job and you have another one, right? But nobody told you it’s gonna be a full-time job. And it’s like having the baby, right? Everybody’s saying, oh, it’s gonna be so much fun, it’s gonna be so easy, right? Then you’re gonna be, but once you get the baby, it’s just your life changing drastically, right?

Igor:
So you got five minutes of fun time and 24 hours of like caregiver, right? Person. So, and that’s a different perspective. The same with me. What happens is I got into 1, 2, 3, 4, so, and I understood I can’t scale that model. So it’s a, it’s not scalable. So it’s pushed us to commercial real estate. We said, okay, what can we do better? How we can be really truly passive investors, right? Not like a sold passive investors. And then, so that led us to the syndication model. So what I’m trying to say, once we enter that market of syndication, so there’s a couple problems which just popped up right away. So one is, how do you find a good syndicator? How do you find the company which you can trust, right? Because if you go out on market and everybody advertise, everybody running some ads and stuff, and again, back then it was different.

Igor:
Nobody was advertising, nobody was pushing anything. But now it’s different. So because everybody’s popping out. So the first challenge is there’s no database. You don’t have, like, it doesn’t exist. You can’t open the book, right? The yellow pages and say, oh, this is the syndicators from A to Z and those are really good, those are bad. And so now you gotta go through the journey. So we start to go through the journey, okay, let’s place a little bit of capital in HI don’t know, 50, a hundred thousand, whatever the requirement is. And we start to really test it. So once you test it with you own money, because, so once you place the capital, you start to see communication. Once you start to see communication, you start to see the problems coming up. Again, it’s not, it’s not all nice and clear, right? It’s always going to be certain challenges.

Igor:
And that led us to three key points. We wanna say we wanna mitigate three things, management risk. So, which is again, the test of your own money. We said, okay, we’re gonna go take a journey when we’re going to be actually going through this process. And we understand what are the managers are doing actually when it’s gonna be tough times, not when it’s fine and easy. When you enter in, in the syndication, when it’s a tough times, you need to refi when the people are not paying, when you got 50% occupancy rate, those are the challenging times. And then the manager will react to that pain. The second one was always location risk, right? If, if everybody wants to be in Texas and few not Houston, Austin for example, right? And there’s a reason to that. But also if everybody’s telling you that, and again, this is me personally, you do you right?

Igor:
But I don’t wanna be the last person in that market, right? I wanna be at least maybe in the middle or somewhere like in the beginning. I wanna go North Carolina. Nobody’s talking about North Carolina four years ago, right? But not, not that much of the exposure to that state, right? And this is for me is location risk. And the last one was asset class risk. So multifamily, yes. Are there any other different asset classes? Yes, there are, right? Okay, let’s, let’s do the storage, right? Let’s do, I don’t know, car wash. And then we start to test, let’s do the private equity chip, maybe organic foods. So we tested with our own capital first and we start to understand which partners are good, right? And we didn’t understand which location good, but we start to test different states, okay, I wanna be present more in states, which is not exposed as much to, you know, general narrative, right?

Igor:
And then for the asset class, it just, the, the idea of pressure. We just talked before the show, the multifamily going through, maybe it’s already went through, but it’s maybe still going through some tough times when we face those interest rates skyrocketed and stuff like that. So, and then, so the refi became very, very painful as well for a lot of syndicators, right? The that coverage rate should like drop and stuff like that. So we wanna be present in different asset classes. So this is another risk mitigation factor for us. So can we put it real quick, having the fun, like having the company which is focused on, for example, you know, there’s big companies which is focused on multifamily. It’s great. I wanna be present there with my capital. Do I wanna build a company which is focused on multifamily? And again, I’m talking about myself.

Igor:
No, I don’t. Why? Because I wanna be able to pivot right? The way into the storage program, sell storage, right? In the fund model. Now I’m talking about why we’re different in the fund model, right? There’s no brainer. You just stop the capital allocation. You’re saying, okay, let’s look at different partners, which is already tested and we wanna be present in sell storage ’cause it’s not consolidated or because it’s in Texas, right? Or because it’s in North Carolina, right? Or South Carolina, right? I dunno Dakotas, right? And something like that. So what I’m saying is there’s a lot more wiggle room and pivot room, right? So you can make that pivot immediately, right? Almost immediately not reacting on the market, but actually kind of even maybe if you I would say if you, I don’t, I don’t wanna say smart enough, or maybe like if you, if you have a long vision, right, you can pivot that before the market even actually shifts, right? Or maybe a little bit right after that things. Anyways, that’s my thoughts on the different model, right? For the fund level.

Charles:
Yeah. ’cause there’s, so there’s, I think there’s two main, like one operator type syndications that I would say would be the first one is a, a fund that is just for one, one operator. And they have, we’re gonna buy five properties, seven properties, 10 properties this year, maybe not this year, but in a regular year, let’s say they would’ve for a couple years back. But the thing though is that, and then you have your single property syndication and what you guys are doing, as I understand it, is you’re having a you are having a fund that is not only diversifying operators markets, but also commercial asset classes. So it allows you guys you know, it allows you, your investors to have a lot more diversity and also for you guys diversification throughout all different types of asset classes throughout without throughout commercial real estate.

Igor:
Absolutely. Yes. Yes. Charles. And, and, and the example would be again, and we talked before the show, so I’m gonna repeat that again. So we, we were so focused on multifamily ’cause it was hot, right? And and it was the right moment, right? ’cause The money was so cheap, right? You can buy a really good deal. So all, all you need to work at like, what’s the LTV? Don’t go, don’t burn it too much or don’t go too thin, right? On that, on equity inside of the deal. And once it turned, like it just turned, I would say maybe it wasn’t like seven to 12 months, right? This skyrocketed the a PR. So, and then the operator after operator start to say, oh, you know, we gotta get capital call here, capital there. So we, we cannot pay the mortgage anymore. And stuff like that.

Igor:
So we, the, the market started to cripple down a little bit. So we said, okay, what can we do better? How we can do a different, we wanna be in real estate, don’t get me wrong. So the real estate, this is the general strategy, right? And that’s what we do, right? Every day. So, but how we can be in different asset basket and we say, okay, can we do the land entitlement? Why? And and the idea was why? Because there is no leverage. ’cause If something uncertain, we say, okay, how we can mitigate that risk of leverage. We we’re gonna do like full equity play. It was full equity play. We don’t care what the banks are telling us ’cause it’s gonna be full equity. That’s one. The second one we’ll do shorter term. So we did 24 months for dill. And again, I’m talking about the product you roll into your investors, would you lock yourself in the unforeseen future, which is uncertain right now, right?

Igor:
So the, the perception will be like five years from now, it’s gonna be who knows what’s gonna happen, right? But when you’re saying now it’s gonna go only 24 months and people are like, oh, you know what, it’s not too bad. Like one year pass by really quick two years. Like I can wait. So 18 to 24 months, a lot better rate perception or a lot better salary rate for investors for sure though. And then the lastly, the return was 20 plus as well. Why? Because there’s certain unique I would say preposition rate of our partner who was doing the deal. So, and all of those things. And people say, yeah, of course we’ll do that, right? So we shift it very fast and people react and they said, okay, we like that. So we do understand what you guys trying to do and why you going this way. So we’ll do that with you. So that’s an idea. Yeah,

Charles:
No, that’s great. So is, as I see it, like your team must review hundreds of different syndication deals. Can you shed some light on how you initially filter sponsors? I mean, obviously you guys probably have a long checklist that we’re not gonna get into in your show, but I think for people that are passive investing maybe for the first time or looking at different sponsors to actually kind of put on their short list, let’s say, I mean, how are you sponsoring filtering sponsors from ones that you will review deals from and ones that maybe aren’t not ready for you? And for your fund, which I is kinda like the wording I hear from family offices when if somebody, a family office might tell me someone has done it for five years, they’ll say, Hey, come back in five years. We love your, we love your business model. We’ll come back in five years. You know, obviously when you have a track record and stuff like that, and that seems kind of like how you guys do it. Can you shed a little light on kind of how you filter those sponsors and shortlist them because you’re working with so many different asset classes. So I I imagine it’s really important to get to those best operators.

Igor:
Yeah, there, there’s a couple things. One was and again, it’s, it’s maybe general knowledge for the people, but I, I’m gonna repeat that anyway. So the people which is gonna make a difference. And again, the people what are making the biggest difference in the deal. That’s what we found out, right? ’cause ’cause Out of 20 deals, I think there’s a couple of them which is didn’t perform well, but there’s like two of them were complete different communication, right? The one I’m, I’m not gonna say any names, but one of them like, oh, we doing everything possible we can. And the other one we just quiet and hopefully it’s gonna blow through, right? So, and and you can say in the future, right? You can say, okay, what if that same problem will be 10 x, right? How are you gonna react to this thing?

Igor:
So, and at the end of the day, it’s people, right? It’s a people’s business. And, and again, some people taking that very serious and very personal as well. So we would love to bet on those horses who’s like more serious and they, they do care about the result, right? And you can’t really understand it in the beginning of the partnership, but you can’t understand it when you’re in the middle of it, right in the middle of the deal. So we tested the people with our own capital so we know exactly where we’re going to on the second, third time. So that’s one the people will be huge. And then location asset class is the second why. Because again, the, when you look at location, so, and then some of them going through, for example, in California, right? So for me it’s a tough preposition to own apartment complex in California.

Igor:
And again, it just for me, for me from my personal experience, I don’t know, maybe because I had my own units in California and I, I was serving the notice of defaults and all of those things because it’s on the side of the person who leaves in the unit, right? It’s not on your side by any means. They do not care what happens with you as a owner of this thing. So they do care what happens and it’s fine, you know, there’s different states for different people and it’s fine. But I don’t wanna be in that system, right? I wanna be in a different location. But it’s more support on the landlord side. So it doesn’t mean you’re gonna be slammed landlord, but it means you protect it right? On the legal side of deals, right? You protect it more than anything in California, for example here, right?

Igor:
That’s one. And then the second, the, again, the asset class. Once we choose a real good operator, not in one asset class, and again, we do want them to be hyperfocused on certain, for example, multifamily. That’s, you guys super good in multifamily, keep doing this, right? If you’re super good on self storage, yes, we would love to see a track record. Number one, we would love to see employees. And what the team looks like is again, coming from the business of background, right? I now understand. So what the structure of any company should look like, right? So you do have department of sales, you do have marketing, you have hr, you have this. So I wanna see the team. So how many people in that team beside that principle, right? If the principal is good, let’s say they qualify, right? So let’s look at the team we’re gonna fly into you, we’re not gonna connect on, so we’re gonna fly in.

Igor:
So we’re gonna walk through the properties, right? We’re gonna talk to the people who live on the property, not who work in the office, who actually live in the property. ’cause They gonna give you the best feedback on the property owner. It’s not the employees who’s working unbias, right? It’s the people who doesn’t care right? About your company. The only thing they care how they treat it in their space, where they live and their living space. And that’s a huge, for us, it’s a huge feedback. So when I see people smiling on the property, when I’m walking with the property management around that right block, right? And everybody’s smiling and they know by name property management, that’s huge. You know, that’s gonna make a huge difference on your success of the deal, right? In the future.

Charles:
Yeah. It’s also true. You get a lot of information from from tenants on properties. I mean when we’ve done walkthroughs and if you, you’re inside units and there’s a tenant in there and you know you’re only in there for a couple minutes. But if you’re asking them, Hey, do you like living here? Do you like the property manager? And they’re gonna be completely honest with you. I mean, this isn’t, they don’t care. You know what I mean? And this is great. And they’ll tell you, that’s what I wanna hear. Like, they don’t fix this. This is usually a thing. They don’t fix this. They don’t do that, they don’t. And you’re like, and as an investor you’re seeing, you’re kind of like licking your lips ’cause you’re like, okay, this is like, I can fix all this. This is just like basic property management.

Charles:
They’ve just kind of like disappeared. You know what I mean? Which, which happens a lot, you know what I mean? With these people, they just like kind of put it on the back burner. They don’t have to know. They’re just like making, using it as like a cash machine investors. So you can come in there, do some upgrades, actually become, be an active property manager, landlord and and, and turn the property around. But that’s a lot of good points on working with the, with the operators. And when you’re going more deal specific, obviously you’re working in landlord friendly states and I know exactly that I’d be my start as a landlord in Connecticut in the Northeast. So nothing like California or New York, but close and very tenant friendly. And but the thing though was that, can you tell us a little bit more, maybe deal specific? Let’s just, well we can just work with like mo whatever asset classes, say multi-family or whatever kind of things that you really look for. Your team likes to see just a couple high level points. When you’re specifically looking at a deal

Igor:
So you’re talking about on the, on the property level, right?

Charles:
Yeah, that’s correct. So you get, so they send you, you know, you’ve got a operator sponsor that you’re all set with, they’re on your short list, right? You like them and you have a property that gets sent out to, what are the first couple, where are you spending your first 15, 20 minutes? Your team, let’s say, looking at it, I know what I’m looking at. What, what kind of stuff are you probably looking at?

Igor:
And again, and it’s obvious, but the basis, right? What’s the price? ’cause Again, going into the deal was a good basis. It’s a lot more wiggle go wrong, right? So you can do a lot of different things wrong and it’s still gonna work. So, so the basis and then how maybe opportunistic play one of the like, clear example could be, okay, we did the hotel conversion. Example would be like the covid hit and theup ancy rate dropped to 10%. So they wanna sell it at 21 million right before pre covid times, right? So once the covid hit and they go through challenging times older owners, right? They, they own it for maybe about 25 years or so. That’s another huge piece. If you see the a building which is owned for last 25 years with the same owner, that means they build so much equity, they most likely to give you a good deal.

Igor:
Whether you’re just buying like after three years of, you know, optimizing operations. I mean, what can they give, what type of discount they can give, what type of wiggle room they have. Nothing. Zero, right? There’s no skin and bone, right? To do that. So, and this is the huge piece, the basis basically. And then how long they’ve been ownership, the previous ownership. So, and then back to that story. So once the covid hit, they were willing, they were not willing, they were begging to buy it, right? If you guys can buy for 14, so from 21 and one down to 14, understanding market meaning. So the covid with all the respect, it’s not gonna be forever, right? We’re gonna go back to the times, right? And we just jump and deal. We buy it, right? And now it’s just the process of remodeling. So again, the basis for the price is huge, right?

Igor:
Going into the deal specific, right? We, we wanna look at the structure. It’s like what are the year built? It’s a tough to deal with 60 still, right? I mean there’s a lot of stuff could be wrong. Again, you open the walls, oh and the city comes in to do inspection. Oh, you need to change electricity now you reinforce structure basement, you gotta do this and this. There’s so much thing could be wrong. So the newer the better. I’m not saying it’s gonna be two thousands, but if you got between like eighties and two thousands, that’s gonna be really good piece. Why? Just the less work. It’s just simple. Less of the risk. ’cause We went through a couple of developments and, and again, that’s my personal experience. I’m not saying it’s not good, but it’s a tough model. It’s a very tough model to make it work.

Igor:
There’s so many moving pieces that gotta aligned together. Yes, people do a lot of, might make money, right, on development, but again, it’s a different model. I’m not, maybe my risk tolerance not there yet, right? So I wanna be a little bit more conservative. I wanna see that build in existence, right? So, and not just, it’s been existing 20 years, like 30, 40, but not 70 years ago, right? So now you facing different challenges, you open the walls and you’re like, who knows what’s gonna be in there? So, and you budget like multiplies by three all of a sudden, right? So this is the huge piece. And again, I’m, I’m speaking more from experience than, than what I’m looking, right? What we’ve been looking at and where we face the biggest challenges, right? And environmental risk as well. Huge. We would love to see environmental reports ’cause those are like a small pieces, which is I would say non-visible, right?

Igor:
The not, it could be like intangible almost, right? So you dig down and then all of a sudden you get a huge, so having that report, extensive report is huge, right? Especially if it’s the dense area, right? Somewhere. And what else on the property level, I think, I think I’m probably going through like the biggest pieces and liens and stuff, but it’s more like a financial background of that. I think that’s it. And all of a sudden, again, the the the less risk, the the minimum of that unforeseen risk. The minimum of that thing you would, which just could be like, couldn’t explode that deal like easily.

Charles:
Yeah. Yeah. That’s really important. What you said about the older properties and what we’re saying older we’re saying sixties and seventies. ’cause There was a lot of construction changes in the United States that really changed and progressed between the seventies and the eighties between the materials being used. They weren’t, some of them were cheaper and that might’ve gone into the, even into the eighties. But I think one of the main things is that you have there is like when you’re looking at a property and you start seeing that, okay, this has some older bones, let’s just say, right? We got galvanized piping, we have this, we have that that are gonna have to be looked at. And when you’re making these things, it’s not that you’re gonna be scared away from it, but you have to have enough meat on the bone to make it sense.

Charles:
Because these aren’t things that no one’s gonna pay you more for rent because they’re, something’s not leaking. You know what I mean? Like the roof’s not leaking or the pipes aren, that’s supposed to be something that’s normally a requirement of your home. So it’s really great that you’re saying that because this is important. So people really see what I would say, like really the bones of the property are good and then when they’re doing their comparables, then it’s kind of honest because now we’re talking about cosmetic finishes to raise rents. And you can’t get to that point if you now have to, you know, you know, re-plumb a house or something like this or rewire stuff ’cause you have a wire and that’s older or whatever it might be. So a lot of, a lot of great points there.

Igor:
One other like and and it’s, again, it’s a very simple thing, but it’s works. And, and again, in my experience it was working always. So it’s maybe a single family idea, right? I wanna be the worst apartment complex in the best neighborhood. I don’t wanna be like the ’cause like you said, no, for the better finish of your wall. Nobody’s gonna pay you that rent ’cause nobody wants to leave there, wake up like you’re gonna do a beautiful remodeling. So no one is gonna want to live there, right? ’cause It’s not a good, it’s not even decent neighborhood. So, but if you got very simple apartment complex and the best school, right? And the best school district and you got the best mall next nearby, right? So people will be living there. So you do a little bit of you know, design, I would say a little bit of like remodel, a little bit of the finishes, right? Upgrade and that’s it. Just the bingo play, right?

Charles:
Right.

Charles:
Do you have money sitting in the stock market? And you’re worried about it or worse. You have money sitting at the bank, not keeping up with inflation. My name is Charles Carillo, founder and managing partner of Harborside Partners. And since 2006, I’ve been investing my money and my family’s money into income producing properties. These are real assets, real properties with real addresses that produce real cash flow. At Harborside Partners, we provide passive investors who love real estate with a turnkey investing solution. If you want to put your money to work in real estate, but can’t find deals, don’t have the time to get funding in. The last thing that productive people want to do is manage real estate. We find the deals. We fund the deals and we manage the tenants, the termites and the properties. Partner with us at investwithharborside.com. That’s investwithharborside.com. Go to investwithharborside.com. If you love real estate, you like the idea of passive income and believe that income producing properties will appreciate over time. Go to investwithharborside.com. That’s investwithharborside.com.

Charles:
So one thing Ur is that you know, our show has a a large global listener base and you know, why do you feel us real estate is an important asset class for international investors?

Igor:
It’s a great question. Really good question. And again, that’s, that’s speaking from personal experience as well. So, and we do speak for our investors. So the huge piece of my investing abroad from real estate, I mean from US market, right? Was let’s say I put down a half a million dollars of real estate in Russia, right? So it’s doing really well. But to do that, you need to convert US dollar into Robles right now. You inherited the risk of that currency conversion. So let’s say in Robles, you’re killing it, it’s double the value, right? The rent is good, rent is coming in. So, but then once you wanna exchange it back here, bring it back to United States and you look at the exchange currency rate and you’ll, I mean you probably make 20% all in all. So double the value in Russians, and again, I’m speaking for my personal experience, but then if you start to calculate in US <inaudible>, which is stronger currency, now I’m talking for everybody.

Igor:
Venezuela, right? Argentina. So, and that exchange rate and currency rate risk, it’s huge. ’cause You might be killing that in the local currency, but once you exchange for Bitcoin, for example, right? It’s like dime you things got, if you didn’t lose the money, right? Again, ’cause by that time dollar Bitcoin like grew in the value triple or four times, right? And then, so I think that was a huge piece for me. Like I don’t wanna meet that in that currency risk, right? That’s a currency risk. And it was economy risk. It was like a legal system risk to actually protect it on the level, okay, if I own that property, I’m leaving the US right? The people come and take it from me. Can I go and file to the court? And I’m talking about for the world right now. So where’s that legal system actually protecting the ownership and US market?

Igor:
By far it’s, it’s like it’s beginning of our country, right? So we wanna protect the ownership. So the owner of land, right? Owner forever, it’s protected by the court system. You can always claim it and, and it’s gonna be protected by this system. So that was huge. And again, it’s very easy selling proposition. You’re saying you wanna diversify yourself in a stronger currency, right? In a stronger legal system, which is protected. And when you start to speak of those things, so people say, okay, I understand. Absolutely, yes, we’ve been through a five year cycle, we lost half of our wealth. So, ’cause if you look at the again, a lot of international already countries right now you go abroad, so they’re losing half of their wealth in the span of five to 10 years.

Igor:
And it’s been like that for the last a hundred years. It’s, it’s accelerated right now. But if you look at the history, so you own and you cal again, I I calculate the bill, you own a hundred dollars, how much a hundred dollars you can buy five years from now for that same, I’m talking about Russian rub because it’s familiar, right? For me. So half of it, right? Again, you, you have of your wealth every five years. Do you wanna be in that environment when you have, so you can’t even catch up yourself, right? You can’t even catch up to the point when you just break even every five years, right? So that’s why you wanna be present in the more stronger market, right? I don’t know. Asset class, legal system. So, and that’s a huge selling proposition for people who’s abroad.

Charles:
When you’re speaking to international investors, what are some of the most common, let’s say questions, feedback or maybe pushback you’re receiving regarding investing in US real estate? ’cause Obviously the currency risk is something that we hear from other investors that are invest with us Foreign, my first LPs was from Eastern Europe, so I know a lot about international investors. So it’s one of those things that you know, when we’re working with this, I mean, let me know kind of like what, what do you usually hear back when you’re working with these investors?

Igor:
You know, the funny thing was like, it’s too far, it’s not ritual. We cannot chuck it. And, and I’m telling for them, maybe it’s for good. You never know. It’s not for bad, it’s for good. And again, a lot of times I’m getting the funniest again, that’s the funniest thing. The fact that he’s saying it’s too far. I was like, what is that matter? So is it too far, too close? So, but I understand people, they’re saying we cannot control it, but basically what they’re saying underneath the water, they’re saying we have no control. And the thing, like we’ve taken the risk and you know, we don’t feel like comfortable, we can just jump on a plane and fly and fight for ourselves, right? Because they have a perception of their own system, right? And this is the biggest concern by far. So it’s too far. I don’t know, I’m not familiar.

Charles:
And that’s a, it’s a wise thing. If you’re, if you’re, if you’re not familiar with an investment or an asset class, don’t invest. You know what I mean? You have to be educated. ’cause That’s when mistakes happen. When you hear people that have lost money, if they’ll tell you about it. And you know, usually there’s an over a reoccurring theme, which is really just that they didn’t understand it or if you ask ’em any kind of question about it, they didn’t understand even the details of it, you know what I mean? So it makes perfect sense. I understand. Totally.

Charles:
What do you think you know, one of my things is that always asking people that have had experience in, in real estate for a decade or so, and kind of when you look back now, I mean, what are common mistakes that you see real estate investors make? I imagine maybe you made ’em yourself or that you see people consistently make it. I mean, after 10 years you see a lot of deals, obviously you guys are seeing a tons of deals in all different asset classes. Are there any kind of things that you’re seeing that are, are common mistakes that investors make?

Igor:
Absolutely. And again, I’ll, I’ll speak from my, I’m more comfortable speaking from my personal experience than from, you know, other people. So there’s a couple things. One is the funny story. So people probably more reaching out to us to place capital than we reaching out to them right now. And this is the, I think this is the cycle of your business when you just establish your name, establish, right? And then all of a sudden people reaching out to you more than you reaching out to them. That’s one. The second one is, my personal experience was if I would focus more on real estate early enough, right? I wouldn’t be testing all the different, you know, because again, having your business, right? The business itself, amazing model, right? There are a lot more people who became a millionaires by running the business or opening the business or, you know, in innovat the business and stuff like technology. So, but then at the same time, the failure late for that thing is a 60%. Let’s, let’s, let’s put it down, 50% within the five years will die out. So every a second business in America will die in five years.

Igor:
So can you, can you talk about real estate like that? Every second building in the United States and the real estate investment will disappear? No way, right? It might, again, you might lose a certain principle amount. You might, again, if you’re gonna get unlucky or if you’re gonna get in a bad deal. So, but for me, it was clear enough after five years of finding that secret investment tool, right? Finding if I would focus early, right on real estate and real estate only, different application, different asset classes, you name it, there’s thousands way to make money in real estate. Thousands like literally, right? It could be a lender, you could be this appraisal, you name it. So if I focus on that one thing early, not looking for different shiny objects, I will be in a different spot right now. ’cause For me it was, oh, it’s working, but maybe I’m gonna find something else. It’s gonna be more sexy, more appealing, more return, more this, you know what I mean?

Charles:
Easier <laugh>.

Igor:
Yeah. It’s more easier. Like you’re right, it’s more, you know, it’s more trendy, people talking about that. So you just focus on one thing, stick to it, right? And the one thing I learned as well, and that’s my personal experience, it’s not get rich quick, but it’s get rich for sure. It means it’s gonna take you a lot more time. But if you’re not gonna quit, there’s gonna be the same level of success. You’re going to get to whatever you wanna do, right? Then your life, if you’re gonna stick to that model, right? But you need to stick, it’s not easy, right? It’s not. It’s might be super profitable one day and very disappointed another day. But again, if you stick for long enough and you start early and you’re not going to be, and I’m talking about myself, probably tell telling my younger self, and you’re not gonna be jumping in different directions, right? So you’re gonna be better off place, right, today.

Charles:
Well, that’s a great way to lead off the show. So how can our listeners learn more about you and your business, Igor?

Igor:
Oh, yes. It, it’s a very simple, right? They can go to the website, it’s like avistafund.com. They can download the book, win realestate game.com. Again, I played sports. I love that. Terminology win real estate game.com, download ebook, learn more about syndications or they can shoot me email igor@avistafund.com. Very simple.

Charles:
Well, thank you so much for coming on today and we’ll put all those links in the show notes and looking forward to connecting with you here in the near future.

Igor:
Thank you, Charles, it was a pleasure. Absolute pleasure speaking with you.

Charles:
Hi guys! It’s Charles from the Global Investors Podcast. I hope you enjoyed the show. If you’re interested in get involved with real estate, but you don’t know where to begin, set up a free 30 minute strategy call with me at schedulecharles.com. That’s schedulecharles.com. Thank you.

Announcer:
Nothing in this episode should be considered specific, personal or professional advice. Any investment opportunities mentioned on this podcast are limited to accredited investors. Any investments will only be made with proper disclosure, subscription documentation, and are subject to all applicable laws. Please consult an appropriate tax legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of Syndication Superstar, LLC, exclusively.

Links and Contact Information Mentioned In The Episode:

About Igor Shaltanov

Igor Shaltanov, founder and managing partner of Avista Fund, is a former professional athlete who transitioned into successful entrepreneurship and real estate investment. Guided by discipline and a relentless drive for excellence, Igor has founded and managed thriving companies and businesses in Southern California.

In 2015, Igor ventured into real estate and established Avista Fund in 2020. This privately held firm focuses on raising capital from investors and investing in income-generating, value-add multifamily properties. Their mission is to provide local and international investors access to US real estate, safeguarding and growing their wealth amidst high inflation rates in their local countries and currencies.

They currently serve as a limited partner to 20 different real estate deals, 3,200+ multifamily units, with a cumulative value of over $500MM. They prioritize conservative underwriting and meticulous due diligence, ensuring a prudent approach to investing while delivering value to both investors and residents.

Igor’s professional journey exemplifies a relentless pursuit of excellence, supported by his values-driven approach to business and investment. Through Avista Fund, he empowers investors and positively impacts the lives of residents and communities.

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